north department of state treasurer information technology

DEPARTMENT OF STATE TREASURER 2015‐2017 IT STRATEGIC PLAN

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North Carolina Department of State Treasurer

Information Technology

Strategic Plan 2015‐2017

TABLE OF CONTENTS


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Table of Contents

NORTH CAROLINA DEPARTMENT OF STATE TREASURER INFORMATION TECHNOLOGY STRATEGIC PLAN

2015‐2017

TABLE OF CONTENTS ....................................................................................................................................................... 1 TABLE OF FIGURES .......................................................................................................................................................... 3 EXECUTIVE SUMMARY ...................................................................................................................................................... 4

DEPARTMENT OF STATE TREASURER OVERVIEW

OVERVIEW ..................................................................................................................................................................... 6 DEPARTMENTAL STRATEGIC PLAN – 2012 ‐2014 ................................................................................................................. 7 DEPARTMENTAL STRATEGIC PLAN – 2014 AND BEYOND ..................................................................................................... 12

OFFICE OF THE STATE TREASURER

OVERVIEW ................................................................................................................................................................... 14 2013‐2015 HIGHLIGHTS ................................................................................................................................................. 15 2015‐2017 CHALLENGES AND OPPORTUNITIES ................................................................................................................... 17 CURRENT SYSTEM PORTFOLIO AND OPERATIONAL ACTIVITIES ............................................................................................. 18 STRATEGIC TECHNOLOGY INITIATIVES .............................................................................................................................. 22

FINANCIAL OPERATIONS DIVISION

OVERVIEW ................................................................................................................................................................... 25 2013‐2015 HIGHLIGHTS ................................................................................................................................................. 27 2015‐2017 CHALLENGES AND OPPORTUNITIES .................................................................................................................. 28 CURRENT SYSTEM PORTFOLIO AND OPERATIONAL ACTIVITIES ............................................................................................. 29 STRATEGIC TECHNOLOGY INITIATIVES .............................................................................................................................. 33

INVESTMENT MANAGEMENT DIVISION

OVERVIEW .................................................................................................................................................................... 37 2013‐2015 HIGHLIGHTS ................................................................................................................................................. 39 2015‐2017 CHALLENGES AND OPPORTUNITIES .................................................................................................................. 41 CURRENT SYSTEM PORTFOLIO AND OPERATIONAL ACTIVITIES ............................................................................................. 42 STRATEGIC TECHNOLOGY INITIATIVES .............................................................................................................................. 47

STATE AND LOCAL GOVERNMENT FINANCE DIVISION


UNCLAIMED PROPERTY AND ESCHEATS DIVISION

OVERVIEW ................................................................................................................................................................... 63 2013‐2015 HIGHLIGHTS ................................................................................................................................................. 65 2015‐2017 CHALLENGES AND OPPORTUNITIES .................................................................................................................. 67 CURRENT SYSTEM PORTFOLIO AND OPERATIONAL ACTIVITIES ............................................................................................. 68 STRATEGIC TECHNOLOGY INITIATIVES ............................................................................................................................... 71

RETIREMENT SYSTEMS DIVISION

TABLE OF CONTENTS


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STATE HEALTH PLAN


INFORMATION TECHNOLOGY DIVISION

OVERVIEW ................................................................................................................................................................. 102 2013‐2015 HIGHLIGHTS ................................................................................................................................................ 107 2015‐2017 CHALLENGES AND OPPORTUNITIES ................................................................................................................. 110 CURRENT SYSTEM PORTFOLIO ....................................................................................................................................... 112 STRATEGIC TECHNOLOGY INITIATIVES ............................................................................................................................ 116

APPENDICES

APPENDIX A – IT ORGANIZATIONAL CHART ..................................................................................................................... 120 APPENDIX B – SYSTEM TO BUSINESS PROCESS MAPPING ................................................................................................... 121 APPENDIX C – BUSINESS APPLICATION AND INFRASTRUCTURE INVENTORY AND ROADMAP ..................................................... 128 APPENDIX D – INITIATIVES BY DIVISION WITH APPROXIMATE COSTS AND ANTICIPATED COMPLETION DATE ................................ 131 APPENDIX E – TIMELINE OF INITIATIVES ............................................................................................................................134 APPENDIX F – STRATEGIC INITIATIVES BY DIVISION ............................................................................................................ 137 APPENDIX G – REPORT TO THE STATE CHIEF INFORMATION OFFICER ................................................................................... 144

TABLE OF CONTENTS


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Table of Figures FIGURE 1 ‐ OST ‐ SYSTEM TO BUSINESS PROCESS MAPPING .................................................................................................... 20 FIGURE 2 ‐ OST ‐ SYSTEM ROADMAP ................................................................................................................................... 21 FIGURE 3 ‐ OST ‐ 2015‐2017 STRATEGIC IT INITIATIVES .......................................................................................................... 23 FIGURE 4 ‐ FOD ‐ SYSTEM TO BUSINESS PROCESS MAPPING .................................................................................................... 31 FIGURE 5 ‐ FOD ‐ SYSTEM ROADMAP ................................................................................................................................... 32 FIGURE 6 ‐ FOD ‐ 2015‐2017 STRATEGIC IT INITIATIVES .......................................................................................................... 35 FIGURE 7 ‐ IMD ‐ SYSTEM TO BUSINESS PROCESS MAPPING ..................................................................................................... 45 FIGURE 8 ‐ IMD ‐ SYSTEM ROADMAP .................................................................................................................................... 46 FIGURE 9 ‐ IMD ‐ 2015‐2017 STRATEGIC IT INITIATIVES .......................................................................................................... 48 FIGURE 10 ‐ SLGFD ‐ SYSTEM TO BUSINESS PROCESS MAPPING .............................................................................................. 58 FIGURE 11 ‐ SLGFD ‐ SYSTEM ROADMAP .............................................................................................................................. 59 FIGURE 12 ‐ SLGFD ‐ 2015‐2017 STRATEGIC IT INITIATIVES .................................................................................................... 61 FIGURE 13 ‐ UPD ‐ SYSTEM TO BUSINESS PROCESS MAPPING .................................................................................................. 69 FIGURE 14 ‐ UPD ‐ SYSTEM ROADMAP ................................................................................................................................. 70 FIGURE 15 ‐ UPD ‐ 2015‐2017 STRATEGIC IT INITIATIVES ......................................................................................................... 73 FIGURE 16 ‐ RSD ‐ SYSTEM TO BUSINESS PROCESS MAPPING .................................................................................................. 85 FIGURE 17 ‐ RSD ‐ SYSTEM ROADMAP .................................................................................................................................. 86 FIGURE 18 – RSD ‐ 2015‐2017 STRATEGIC IT INITIATIVES ........................................................................................................ 89 FIGURE 19 ‐ SHP ‐ SYSTEM TO BUSINESS PROCESS MAPPING .................................................................................................. 97 FIGURE 20 ‐ SHP ‐ SYSTEM ROADMAP.................................................................................................................................. 98 FIGURE 21 ‐ SHP ‐ 2015‐2017 STRATEGIC IT INITIATIVES ...................................................................................................... 100

EXECUTIVE SUMMARY


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Executive Summary The last two years have been a period of great change for the Information Technology Division of the North

Carolina Department of State Treasurer (NCDST). The State Health Plan of North Carolina was placed under

the administration of the State Treasurer, necessitating a merger of IT systems and support for technologies

not previously used by NCDST. Economic recovery created a surge in retirements and staff departures for

private‐sector employment, resulting in the turnover of over 25% of the IT Division’s personnel. Despite new

responsibilities and new staff, the IT Division was able to address many critical technology needs and

strategic goals of NCDST.

A complete overhaul of Death Benefits processing and payments for the North Carolina Retirement

Systems was implemented in 2013.

Work began in 2014 on an upgrade of the State’s Core Banking platform, with new functionality to

replace a cash management used by the Office of State Controller for over 20 years.

Significant progress was made in the replacement of IT systems used by the State and Local

Government Finance Division with the implementation of new audit and financial reporting systems.

The IT Division successfully upgraded major components of NCDST’s network and storage

infrastructure.

The next two years will again be a period of great change for NCDST and IT Division. Beginning in 2014,

NCSDT will be moving from the Albemarle Building in Downtown Raleigh, the agency’s primary office for

over 40 years. As part of this move, the IT Division must determine the future direction of departmental data

center operations, currently housed in the Albemarle Building. In 2014, an operational study of the IT Division

was performed, highlighting the need for changes in governance, project and resource management, and

service delivery. The implementation of these recommendations will be a major effort of NCDST over the

next two years. At the same time, the IT Division must continue work on key departmental initiatives, as well

as expand the services offered by the department to constituents and citizens.


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Department of State Treasurer Overview

DEPARTMENT OF STATE TREASURER ‐ OVERVIEW


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Overview

The Department of State Treasurer serves the people of North Carolina through a variety of functions

related to the financial health of the state and its citizenry. State Treasurer Janet Cowell serves as the

state’s banker and chief investment officer, and, as such, she is responsible for nearly $100 billion in

assets.

The Department administers the public employee

retirement systems for more than 900,000 North

Carolinians, as well as the 401K and 457 plans for

public employees. The Department provides fiscal

assistance and expertise to local governmental

units by assisting them in the sale of local

government debt obligations and in maintaining

good budgeting, accounting, reporting, and other

fiscal procedures. It also administers NC Cash, the

unclaimed property database that holds more than

$500 million.

The vision of the Department of State Treasurer is

to create and maintain a fiscally sound and

prosperous North Carolina. We work to achieve this

goal by taking utmost care in overseeing the

finances of the State. By striving for excellence in

our day‐to‐day work at the Department, we hope

to instill confidence in the state’s citizens,

customers and financial community.

The Department of State Treasurer is made up of approximately 425 employees, and comprises the

following divisions:

Office of the State Treasurer Retirement Services Division

Financial Operations Division State Health Plan

Information Technology Division State and Local Government Finance Division

Investments Management Division Unclaimed Property and Escheats Division

Vision

The vision of the Department of

State Treasurer is to create and

maintain a fiscally sound and

prosperous North Carolina.

We work to achieve this goal by

taking utmost care in overseeing

the finances of the State.

By striving for excellence in our day‐

to‐day work at the Department, we

hope to instill confidence in the

state’s citizens, customers and

financial community.



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Departmental Strategic Plan – 2012 ‐2014

At the heart of the Department’s work are its core values, which are implemented consistently at all

levels and across all Divisions:

• Integrity

• Accountability

• Transparency

• Expertise

• Customer service

• Long‐term view

In the interest of promoting these core values, the

Department continues to work on its highest priorities

and detailed plans for their achievement. The

Department has realized many of these goals and

continues to build on them.

• Protecting the Pension Fund

• Maintaining the State’s AAA Bond Rating

• Improving Health Outcomes for Public Employees while Promoting Fiscal Stability of the State

Health Plan

• Ensuring Transparency, Ethics and Accountability

• Increasing Customer Service

• Increasing Operational Efficiencies and Improving Risk Management

• Contributing to State Innovation and Economic Development

• Advancing Financial Literacy across North Carolina

Protecting the Pension Fund One of the primary responsibilities of the Department of State Treasurer is to provide a safe and secure

retirement for North Carolina’s 900,000 public employees, including teachers, police officers,

firefighters and public servants. These individuals rely on the integrity, knowledge and judgment of the

Department of State Treasurer.

The North Carolina Pension Fund is invested for the long term, and is conservatively managed to

protect the full funding status. This keeps our state prepared to pay out obligatory pension benefits.

Alignment

All departmental initiatives,

including those with a

technology component, are

assessed by the Department

of State Treasurer’s Strategic

Plan Steering Committee to

ensure alignment with these

goals.



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Below are a few of the initiatives undertaken during the fiscal year to help ensure a secure retirement

for public employees:

• Introduced and received bipartisan support for Senate Bill 558 to obtain additional investment

flexibility for the state pension fund to take advantage of available opportunities besides low

bond returns.

• Initiated an independent fraud, waste and abuse assessment through Buck Consultants to

evaluate the risk for fraud and waste in the Retirement Systems and other benefit plans it

administers. The Retirement Systems Division will use the information provided in this

evaluation to prevent abuse of its benefit programs and improve oversight of public resources.

• Announced a new chief investment officer for the North Carolina Retirement Systems in

January 2013.

• Achieved a 9.52 percent return in the pension fund portfolio during the 2012‐2013 fiscal year,

outperforming the 7.25 percent long‐term target rate of return and the market benchmark of

8.1 percent. As of June 30, 2013, pension assets were valued at $80 billion.

• Announced a new program to invest with firms that will help select emerging managers for the

North Carolina pension fund’s equity investment portfolio. Two firms were selected for the

initial round of investments. The firms were chosen based on their proven track record of

identifying small investment firms with the potential to achieve above benchmark results.

Maintaining the State’s Triple‐A Bond Rating A triple‐A bond rating indicates that North Carolina has followed well‐defined financial management

policies and demonstrated strong debt management practices. Standard and Poor’s, Moody’s Investors

Service, and Fitch Ratings – three primary bond rating agencies – all reaffirmed the “AAA” rating for

North Carolina in the 2012‐13 fiscal year. North Carolina remains one of only nine states to enjoy top

tier rankings from all three of the ratings agencies.

While maintaining this strong rating is a good sign of the state’s fiscal health, federal budget deficits

may present a challenge to sustaining the triple‐A rating. Bond ratings are largely dependent on the

economic stability and diversity of revenues, conservative debt management, administrative

capabilities, fiscal performance and financial condition, including funding of long‐term benefit

programs such as the retirement systems and health care.

Each year, the State’s Debt Affordability Committee makes recommendations to the Governor and

General Assembly concerning the debt capacity of the General Fund, Highway Fund and Highway Trust

Fund for the next 10‐year period. While a number of factors are considered, the main factor

determining each fund’s debt capacity is the percentage of State tax revenues that are dedicated to

debt service. The Committee recommends debt service not exceed four percent of State tax revenues

in the General Fund and not exceed six percent of State revenues in the Highway Fund and Highway

Trust Fund.



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Below are a few of the achievements in maintaining the triple‐A bond rating:

• Oversaw the issuance of $3.9 billion in local debt ($4.2 billion in the previous fiscal year), $2.3

billion in revenue bonds for state and regional authorities ($1.3 billion in the previous fiscal

year), and $1.6 billion in state debt ($1.3 billion in the previous fiscal year).

• A July 2013 report from the Pew Charitable Trusts, entitled The State Role in Local Government

Financial Distress, profiled the Local Government Commission (LGC) as one of the most

extensive local government assistance programs in the United States. LGC was recognized as

the oldest intervention program in the country, emphasizing state‐level monitoring to detect

early signs of trouble. The report noted that the three national rating agencies reward North

Carolina communities with higher bond ratings because of the Commission’s oversight.

• Released the Debt Affordability Study in February 2013, which provides the Governor and

General Assembly with a basis for assessing the impact of future debt issuance on the State’s

fiscal position and enables informed decision making regarding both financing proposals and

capital spending priorities. The Study shows $351 million available in each of the next 5 years

• Awarded $1.3 billion obligation refunding bonds, saving the state approximately $59.3 million in

debt service costs.

Improving the Health of Public Employees While Promoting Fiscal Stability of the State Health

Plan During fiscal year 2012‐2013, the State Health Plan completed its first full year as part of the

Department of State Treasurer. In January 2012, the Department of State Treasurer took over

responsibility for managing the day‐to‐day operations of the State Health Plan. In doing so, the

Department aims to ensure the Plan remains fiscally stable while improving the health of state

employees.

The Plan had formerly been governed by a legislative oversight committee within the General

Assembly. Numerous reports had suggested organizational changes to the Plan and recommended

that it be moved to a different governing model. Over the past year, additional steps were taken to

ensure a strong governance structure for the State Health Plan and cost savings for members and the

State.

• The Treasurer went on a listening tour across our state to hear ideas and concerns from

members. She heard that they wanted lower out‐of‐pocket costs, more choices, and to be

rewarded for wellness activities, which were considered by the State Health Plan’s Board of

Trustees.

• The Plan’s Board of Trustees voted to offer more choice and new plan options to members

beginning on January 1, 2014, in response to member concerns. These new options include

Medicare Advantage Plans and financial incentives for wellness activities and to encourage

healthy choices.



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• In April 2013, a new executive administrator of the State Health Plan was named to manage

responsibility for the day‐to‐day operations.

• Following the first year of oversight of the State Health Plan, the Unfunded Actuarial Accrued

Liability (UAAL) of the Plan has been reduced by $9.7 billion.

• The Plan re‐bid the Third Party Administrator contract, resulting in savings of approximately

$22.4 million annually.

• As part of the transition, the Plan took on a fresh new look.

Ensuring Transparency, Ethics, and Accountability Treasurer Cowell continues to recognize that restoring public confidence in financial markets, banks

and government is necessary in the successful execution of the office. Access to government meetings

and documents is enshrined in the state’s constitution and is one of the pillars of a strong democracy.

• Continued to convene Audit Committee meetings to ensure integrity of financial reports and

other financial information provided to any governmental body or the public, oversee the

performance of the Internal Audit Division, and ensure compliance with internal controls

regarding finance, accounting and operating procedures. All committee meetings are open to

the public and all audit reports are made public and submitted to the Office of State Budget

and Management.

• Conducted multiple independent reviews, including on Investments and Retirement.

Enhancing Customer Service Customer orientation is a core value for the Department of State Treasurer. The customer is at the

center of our focus in all that we do.

In 2012‐13, we continued technology and process improvements to ensure that each North Carolina

citizen experiences time savings and solid customer service when accessing or inquiring about

Department of State Treasurer services.

• Upgraded the Department’s email communications and social media to enhance outreach to

members, constituents and stakeholders more efficiently and in real‐time.

• Began implementation of a new 403(b) retirement savings option, to be made available to K‐12

teachers and other public school personnel in North Carolina. The optional program will allow

school systems to offer increased participant services, reduced participation fees and

confidence that the plan is in compliance with IRS regulations.

• Continued to offer and enhance training programs to improve employees’ customer‐relation

skills, improve their knowledge of systems and processes, and promote their professional

development.



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• Introduced “Bill the Bill,” a mascot to increase visibility and outreach for the Unclaimed

Property program.

Increasing Operational Efficiencies and Improving Risk Management The Department of State Treasurer is consistently looking for ways to increase efficiencies and reduce

risks. These strategies allow us to provide value to North Carolina taxpayers through cost savings and

increased security.

We assessed and identified operational areas for efficiency gains in 2012‐13. As a result, we

implemented new technologies, as well as improvements in personnel and project management, that

will produce time and cost savings for the Department while allowing us to maintain a high level of

service to the citizens of North Carolina.

In the interest of improving operational efficiency, the Department took the following steps:

• Completed audits of Human Resources – Separations; the Retirement Systems Division’s

Employer Reporting process and Firefighter and Rescue Squad Workers’ process; Unclaimed

Property Division’s Claims process; and Financial Operations Division’s Cash Concentration.

• Implemented “AutoAudit,” a fully integrated audit system that allows the Department’s

Internal Audit section to complete their work in a single database for risk assessment, planning,

scheduling, work papers, reporting, issue tracking and administration. AutoAudit is integrated

with Issue Track, which is used by auditees to respond to issues uncovered during the audit

process.

• Reformed the receiving process within the Unclaimed Property Division to reduce risk and

further safeguard the receipt and handling of tangible unclaimed property.

Contributing to State Innovation and Economic Development Treasurer Cowell recognizes the importance of economic development in building and maintaining a

financially strong and prosperous North Carolina. In addition, the Treasurer realizes that state

innovation plays a significant role in driving economic development.

In order to encourage innovation and economic development throughout North Carolina, the

Department:

• Continued to identify and invest in North Carolina‐based businesses through the $232 million

N.C. Innovation Fund, which was established in March 2010 to achieve returns for the pension

fund while helping North Carolina‐based businesses expand their operations and create new

jobs. More than $170 million has been committed to seven private equity managers and 11

companies through co‐investments alongside private equity managers.

• Increased deposits to North Carolina community banks from $4 million to $70 million over the

last two years.



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Advancing Financial Literacy The Department of State Treasurer is committed to helping North Carolina families increase their

understanding of finances and ability to grow personal wealth. Financial literacy helps provide citizens

of all ages with the information and resources to manage their finances and make important financial

decisions.

We continued to expand our financial literacy efforts in 2012‐2013. The following initiatives were

implemented during the fiscal year:

• Continued to partner with the College Foundation of North Carolina and expanded Advanced

Money Management for Community College Students. The online tool helps community

college students assess the amount of loans they could reasonably expect to pay back after

graduation, thereby helping them avoid incurring unmanageable debt.

• Launched a Pre‐K through 2nd grade Financial Literacy Program featuring Patches the Pig, to

introduce young children to important financial concepts and help provide a critical foundation

for beginning students. Treasurer Cowell visited public libraries and schools across the state,

reading the story of Patches the Pig and engaging North Carolina students around the

importance of good saving and spending practices at an early age.

• Expanded financial literacy outreach from pre‐kindergarten to K‐12 and community colleges.

Departmental Strategic Plan – 2014 and Beyond The Department of State Treasurer has adopted a new set of strategic goals, reflecting a continued

commitment to the Department’s Core Values, while focusing efforts on four key activities:

Provide Public Leadership in Finance, Fiscal and Health Policy

Enhance Accountability of Department Services

Innovate and Modernize Operations

Maximize the Talent of our People

The challenges and opportunities for each of the Department’s divisions are aligned with these

strategic goals, as are the technology initiatives outlined within this plan.


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Office of the State Treasurer



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Overview

The Office of the State Treasurer (“OST”) serves

the administrative oversight functions of the


OST is led by the Treasurer’s Chief of Staff. The

Chief of Staff oversees all operations of all

departmental staff.

OST is composed of the following sections:

Communications and Special Programs

Constituent Services

Financial Literacy

Internal Audit and Compliance

Legal Services

Legislative Services

Policy Management

Human Resources

The Communications and Special Programs

Section directs all internal and external

communications and manages communication‐

related programs to support the overall strategy of

the Department.

The Constituent Services Section of the OST is

charged with working with and responding to the

concerns and issues of the people of North

Carolina in a thorough, timely and professional

manner.

The Financial Literacy Section helps North

Carolina’s families increase their understanding of

finances and ability to grow personal wealth.

Internal Audit helps the organization accomplish

its objectives by bringing a systematic, disciplined

approach to evaluate and improve the

effectiveness of risk management, internal

controls, and governance processes.

The Legal Services Section is responsible for

reviewing policies, procedures, communications,

and contracts to ensure compliance with state and

federal law.

Legislative Services is responsible for various

functions, including coordinating the development

of the Department's legislative agenda in line with

the Department's vision and mission and helping

to develop Departmental policy.

The Policy Management directs the agency’s

external policy program by managing policy for

DST Boards and Commissions. This section also

assists Legislative Services with management of

the department’s legislative agenda and post‐

legislative initiatives.

The Human Resources Section partners with DST

employees and managers to get the right people

doing the right work, develops employees for

future challenges, and drives a culture of

accountability and high performance.



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2013‐2015 Highlights

New Communication Support Tools Over the past two years, OST has partnered with IT to implement a number of new tools to support the

efforts of the OST Communications Section. Scheduling public events and the maintenance of key contact

information related to event management has long been a difficult task for the division. In 2013, OST began

using SalesForce.com to consolidate the State Treasurer’s calendar. By maintaining the schedule in a

centralized, online repository, event calendars are available from anywhere and any Internet‐connected

device. Key contact information is also maintained in the repository, allowing OST staff to access important

telephone numbers and e‐mail addresses while on the on‐the‐road.

The OST Communications Section has also implemented iContact for bulk e‐mail messaging and

management of subscription e‐mail services. Prior to this, the department used an on‐premise ListServ

system to send e‐mail communications to the hundreds of thousands of members of the NC Retirement

Systems. This software was difficult to use, often fraught with problems when dealing with large mailing lists,

and most importantly, it did not allow members to selectively subscribe and unsubscribe from departmental

communication. With the implementation of the iContact subscription service, the agency was able to clean‐

up mailing lists of outdated and inactive e‐mail addresses and offer citizens more flexibility in receiving e‐mail

communication. Successful use of iContact by the Retirement Service Division promoted the State Health

Plan to discontinue use of a more costly alternative subscription service and the use of a single consolidated

system has resulted in cost savings for the agency.

In 2011, when the Department of State Treasurer began utilizing SharePoint for web content management,

the agency lost the ability to monitor web activity and conduct analytics on site usage. WebTrends 9, the

analytics platform used by DST at the time, was in capable of properly capturing data from SharePoint‐based

sites. In mid‐2012, DST IT identified WebTrends On Demand, a Software‐as‐a‐Service offering from

WebTrends, as a suitable alternative for web analytics. In early 2013, DST IT had completely integrated

WebTrends On Demand with the agency’s website, NCTreasurer.com, and the department’s Intranet site,

Compass. Later that year, integration was completed with two other public websites hosted by the

department and the on‐premise system was retired. Through the effective capture and analysis of web

metrics, the OST Communication section has been able to tailor website content for maximum impact and

ease of use. The DST IT Division has also used web analytics to understand site utilization and project future

resource needs.

Expansion of Existing Toolkits Beginning in late 2012, the agency expanded use the SharePoint platform to allow for greater collaboration

and improved management of divisional projects. Working with DST IT, project teams started using

SharePoint Team Sites to manage project communication, documents, and other important information.

Since that time, over 30 Team Sites have been initiated. Notably, Team Sites were used in the review,

revision, and centralization of all department policies, as well as for the digitization and storage of critical

legal documents for the Investment Management Division. Team Sites were also used to manage a number

of projects for the Retirement Systems Division, including enhancements to Death Benefit Processing, the

creation of a public dataset of member information, and an overhaul of the ORBIT system for management of

the Firefighters' and Rescue Squad Workers' Pension Fund.



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Strategic and Operating Management Prior to 2013, the Department of State Treasurer utilized Project Tracker, an internally developed application,

for management of the agency’s strategic plan and strategic initiatives. The application was lacking in many

areas; reporting was difficult and no functionality existed for quick‐access scorecards, dashboards, or other

summary information. Links between goals, initiatives, milestones, risks, analysis, and recommendations

were either complicated to manage or did not exist. Project Tracker also lacked functionality to capture,

maintain, and present metric information for quantitative measurement of the department’s progress on

strategic initiatives.

In May of 2013, the agency selected ClearPoint, a subscription‐based software tool, for management of the

DST Strategic Plan. The product, made by Ascendant Strategy Management, is geared specifically for public‐

sector organizations, and is also used by the City of Durham for the management of their strategic goals.

Leadership from within the Office of State Treasurer populated the tool with the agency’s goals and

initiatives, and worked with other DST leaders to define project timelines and key performance metrics. DST

instituted procedures for progress reporting and review, and each month, division leadership uses the tool to

update project timelines, report data, and provide narrative analysis and recommendations regarding each

initiative. Briefing books that combine data visualization and narrative are prepared from within the tool to

monitor progress and provide management with a tool for effective oversight. The agency is preparing to

expand the use of the tool from the strategic to the operational, for the capture of key operational metrics

related to core Departmental functions.



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2015‐2017 Challenges and Opportunities

Innovate and Modernize Operations – Mobility for Boards and Commissions The Department of State Treasurer, like many State agencies, interacts with a large number of boards and

commissions. The Local Government Commission, the Investment Advisory Committee, and the Teachers’

and State Employees’ Retirement System Board of Trustees are just a few of the boards and commissions for

which the agency must prepare volumes of physical documents for each meeting. The preparation process is

time‐consuming and inefficient, especially as board and committee members have expressed a desire to

move to the use of electronic media for meeting material. A strategy for the dissemination of electronic

documents for board and commission meetings must developed. This strategy must include security

provisions to protect proprietary or sensitive personnel information not subject to the North Carolina Public

Records Act. Ideally, the proposed solution will also incorporate elements of mobile and tablet technology, to

permit board members to review documents on a variety of devices, both inside and outside of meetings.

Innovate and Modernize Operations – Process Automation and Online Forms There are a large number of internal processes to DST that are paper‐driven. Processes related to the

recruitment of personnel, the reimbursement of travel and business expenses, and the procurement review

and approval process all require the routing of paper documents between individuals across multiple

divisions. The use of paper documents is generally inefficient, introduces the risk of loss, and presents a

challenge for long‐term storage and recovery. Furthermore, since all routing is done in‐person, there are no

methods for individuals to track the progress of hiring requests, reimbursements, or other processes. OST

seeks to modernize practices around process management, utilizing electronic forms to replace paper

documents, and workflow and business process automation tools to replace physical routing of documents.

Leveraging technology solutions for online forms and process automation will increase operational efficiency,

provide more effective storage of critical information, and permit better management insight into process

operations.

Enhance Accountability of Department Services – Governance and Portfolio Management As reported in the IT Operational Study, the Department of State Treasurer lacks effective governance of

information technology projects and initiatives. This is not confined solely to IT; Departmental steering

committees also lack effective governance over departmental data analytics activities. At the same time, DST

has also undertaken an initiative to create Service‐Level Agreements (SLAs) for all core internal functions.

HR, Legal Services, Department Accounting, Communications, and IT are all developing SLAs to define and

manage their service relationships to other DST divisions and operating units. Performance measurement is

an important of these SLAs, and OST leadership also need will need to monitor SLA performance to ensure

effective service delivery across the organization. OST requires tools and technologies to support these two

important management activities: oversight of the departmental project portfolio, from inception to delivery,

and oversight of operational performance in alignment with agreed‐upon SLAs.



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Current System Portfolio and Operational Activities The Application Portfolio of the Office of the State Treasurer supports the business operations of the division.

The following systems are essential components of normal business operations. A mapping of business

processes to systems is provided in Figure 1 ‐ OST ‐ System to Business Process Mapping. The 2014‐2018

Application Roadmap for the division is provided in Figure 2 ‐ OST ‐ System Roadmap.

NCTreasurer.com and COMPASS – Microsoft SharePoint The web content infrastructure of DST is run on SharePoint 2010. The system was implemented in 2011, first

for the Department’s intranet site, Compass, then in 2012, for NCTreasurer.com, the public website of the

agency. The web content management features were developed by Highmark Solutions, in conjunction with

i3 Solutions. The department has implemented a distributed content authoring model, with workflows for

content review and approval. DST has also utilizes the SharePoint platform’s collaborative features such as

team sites and document libraries for agency project teams.

ClearPoint ‐ Strategic Plan and Operating Model Compliance

ClearPoint from Ascendant Strategy Management is a strategic plan and project management toolkit with

integrated management reporting, scorecards, and dashboards. The Software‐as‐a‐Service (SaaS) solution is

used across the Department of State Treasurer for management of the agency’s strategic plan and operating

model. Key strategic initiatives are tracked in the tool, along with milestones, project timelines, risks, analysis

and recommendations, and key performance metrics. Performance measurements for departmental

operational activities are also tracked in the tool. The information is presented in a series of scorecards and

management reports for further management oversight and analysis by the State Treasurer and her staff.

WebTrends On Demand – Web Analytics

WebTrends is a web analytics package used to monitor activity on the public websites of the Department of

State Treasurer. DST currently uses WebTrends On Demand, a SaaS offering specifically designed to monitor

activity on SharePoint‐based websites. The web analytics software is also used by the ORBIT Self‐Service

application and the SLGFD Financial Dashboard to monitor citizen and constituent utilization.

iContact – Bulk e‐Mail and Mailing List Management

DST utilizes iContact, a SaaS e‐mail marketing solution for bulk e‐mail messaging and management of

subscription e‐mail services. The iContact platform is used across the entire department, for e‐mail

communication with members of the North Carolina Retirement Systems and members of the State Health

Plan of North Carolina. The tool also provides ListServ‐type functionality for mailing groups, used primarily

by local government finance officers.

Constituent CaseTracker – Constituent Service Management

Constituent CaseTracker was developed in‐house by the IT Division. Built on the same .NET platform as the

DST IT Helpdesk, both Constituent CaseTracker and the Helpdesk systems are very similar in appearance,

behavior, and functionality. Constituent CaseTracker is used to record and monitor departmental action

related to inquiries and issues raised by citizens regarding the agency. This system is being evaluated for

replacement as part of a Departmental contact and case management solution.



19

SalesForce.com – Event Scheduling and Contact Management

SalesForce.com is a SaaS‐based contact and schedule management tool utilized by the Office of the State

Treasurer for the management of public events. Event scheduling, as well as key contact information related

to events, are managed by this tool.

CisionPoint – Press Management

CisionPoint is a subscription‐based, press management solution, utilized by the OST Communications

Section to monitor media coverage, press articles, and analyze the results of communication activities. The

software also enables the distribution of press releases and the management of media lists.

AutoAudit – Internal Audit Management

AutoAudit is a software package in the Thomson Reuters Accelus Suite designed for Internal Audit

organizations. The Internal Audit section of OST uses AutoAudit to plan and track audit activities and

progress, maintain workpapers from audits, and record issues and findings and track follow‐up activities.

Issue Track, an add‐on to Auto Audit, is a web‐based tool used by the Department to internally publish

findings and collect follow‐up activity and responses from agency personnel.



20

NORTH CAROLINA DEPARTMENT OF STATE TREASURERCurrent Applications Systems


CASE TRACKER(In-house Developed)

Track OST Constituent Calls and Casework

NCTREASURER.COM

(Vendor DevelopedIn-house supported and

maintained)

WEBTRENDS ON DEMAND(Hosted)

Provide usage metrics for Treasurer’s Website, DST Intranet, and ORBIT Self-

Service

iCONTACT(Hosted)

Mass electronic mailing services for Department of State

Treasurer

COMPASS INTRANET


maintained)

Public Interface to Retirement Systems, Unclaimed Property,

Banking, State and Local Government, Investments, Job Seekers, and other

OST initiatives

DST Employee interface to HR Forms, News, Job Seekers and

other Department related information

Applications Business Processes

AUTOAUDIT(Purchased)

Maintain artifacts and records of

the Internal Audit section

CISIONPOINT(Purchased)

Database of print, online, broadcast and social media mentions of the

Department of the State Treasurer

CLEARPOINT(Hosted)

Strategic Plan and Operating Model

Management Tool for Department of State

Treasurer

SALESFORCE.COM(Hosted)

State Treasurer Event and Contact Management

Figure 1 ‐ OST ‐ System to Business Process Mapping



21

Department of the State Treasurer - Application Roadmap

2014 2015 2016 2017 2018Office of the State Treasurer

NCTreasurer.com/COMPASS - SharePoint Maintain Maintain Enhance Maintain MaintainClearPoint Maintain Maintain Maintain Maintain MaintainCaseTracker Maintain Replace SalesForce.com Maintain Maintain Maintain Maintain MaintainWebTrends OnDemand Maintain Maintain Enhance Maintain MaintainiContact Maintain Maintain Maintain Maintain MaintainAutoAudit Maintain Maintain Maintain Maintain MaintainCision Maintain Maintain Maintain Maintain Maintain

Figure 2 ‐ OST ‐ System Roadmap



22

Strategic Technology Initiatives

Workflow and Online Forms for Web Infrastructure Utilizing the existing SharePoint infrastructure and other digital imaging tools in use across the agency, DST

IT will partner with OST to expand the use of business process automation and online forms for internal

processes. Tools for workflow and form management are being evaluated for potential use; at the same time,

existing workflow technologies used for RSD and UPD business processes are also under consideration. A

number of processes that could benefit from business process automation have been identified and are being

considered in the evaluation of tools. DST IT will continue to work with OST on the identification of an

extensible workflow solution for SharePoint to support these processes. Simultaneously, potential tools for

online forms and data capture will be evaluated. Following the selection and procurement of appropriate

tools, expected to be completed in 4Q 2015, OST and DST IT will establish a strategy for the conversion of

manual, paper‐based processes to electronically managed processes. Travel and Business Expense

reimbursement is likely to be one of the first processes converted in 2016. Subsequent implementations of

new processes will continue throughout the year.

Tools for Governance Management Initiatives to develop governance structures for information technology project and data analytics projects

are currently underway. At the same time, SLAs are being developed and implemented across the entire

department. While SLAs will be in place before the end of the 2015 FY, new governance structures and

processes will likely continue to be developed through the end of 2015. As part of the development of the

new governance structures and processes, OST will require tools for project portfolio management, including

initiation, evaluation and monitoring, as well as a centralized repository for operational metrics related to

SLA performance. Beginning in 1Q 2016, DST IT will work OST to identify appropriate tools that will be meet

the needs of the new governance structures. Procurement and implementation are expected to begin in late

2016 and continue into the following year.

Digital Imaging and Document Warehousing In support of a migration away from paper‐based business processes and to enable more use of digital

technology by boards and commissions, OST and DST IT will partner to develop a strategy regarding digital

imaging and document warehousing. Currently, DST IT supports a large and diverse portfolio of electronic

document management tools. Some of these systems can likely be consolidated, creating a small handful of

platforms that will reduce the IT support burden and make it easier for DST employees to work across the

technology portfolio. In 2015, the Department of State Treasurer will move to a new facility, consolidating all

eight divisions into a single office complex. Plans for the new facility call for a centralized document imaging

center to consolidate division‐specific document scanning centers currently in two different buildings.

Following the completion of the move, DST IT will begin working with OST to leverage the consolidated

scanning center for departmental use, with a special emphasize on the digitization of documents required for

board and commission meetings. This work is expected to begin 2Q 2016.



23

Office of the State Treasurer – 2015‐2017 Strategic Information Technology Initiatives

Gov

erna

nce M

anagemen

tWorkflow and

Online Form

s

Digital Im

aging

and Doc

ument

Wareh

ousing

Jan 2016‐Dec 2016Jun 2014‐Dec 2014 Jan 2015‐Jun 2015 Jul 2015‐Dec 2015

Evaluate Workflow and Form Tools for

SharePoint

Identify and Rank Processes for Conversion

Begin SLA Operational Data

Collection

Setup Consolidated Imaging Center in

New Facility

Procure eDiscovery Tool(s)

Implement eDiscovery Tool(s)

Procure and Deploy Tools

Convert T & B Expenses Process to

Online Digital

Conduct Additional Conversions for

Existing Processes

Review SLA Data Management Tool Requirements

Review Governance Board Tool

Requirements

Establish IT and Data Analytics Governance Processes

Implement Tool or Expand Use of ClearPoint

Figure 3 ‐ OST ‐ 2015‐2017 Strategic IT Initiatives


24

Financial Operations Division



25

Overview

The Financial Operations Division (“FOD”)

performs the State Treasurer’s role of serving as

the State’s Banker and ensures that efficient

banking services are provided to all State agencies

and institutions. FOD is also charged with properly

accounting for and reporting on all funds that are

deposited, invested and disbursed through the


The Division comprises five areas:

• Banking Operations

• Bank Reconciliation Unit

• Statewide Accounting Operations

• Departmental Accounting

• Procurement and Contracting

History In 1925, the General Assembly passed a law

stating that all deposits received by the State must

be deposited into centralized accounts in the

name of the State Treasurer at banks approved by

the Treasurer. In 1929, it designated the State

Treasurer’s office as the centralized office of

deposits and disbursements. As such, the position

of Treasurer for each state agency and

department was eliminated. This centralized

system for managing the flow of moneys collected

and disbursed by all State departments, agencies,

institutions and universities ensures that the State

continues to be the prime beneficiary of the flow

of State funds through the commercial banking

system in the course of conducting State business.

By 2009, the Department began issuing warrants

electronically to vendors, employees and retirees.

FOD was formed in its current setup in 2001 for

the Banking Services and accounting functions. In

December 2013, a new centralized Procurement

and Contracting section was created to support all

of DST’s purchasing and contracting.

Banking Operations

All revenues collected by a State entity on behalf

of the State must be deposited with the State

Treasurer. Banking Operations maintains

depository relationships with various North

Carolina banks and savings institutions in order for

those entities to have a convenient location to

make their deposits. Relationships are maintained

with six of the major banking institutions that

have a statewide branch network (Wells Fargo,

Bank of America, PNC, First Citizens, BB&T and

SunTrust), as well as more than 20 other banks

across the state. State funds are deposited both at

branch locations as well as electronically through

Automated Clearing House and wires. Banking

Operations reviews all incoming electronic

payments and ensures that the funds are credited

to the account of the agency expecting the funds.

State entities disburse funds from their accounts

maintained with the State Treasurer either

electronically or by the issuance of warrants or

checks. During fiscal year 2013‐2014, more than 5

million warrants were processed, representing

approximately $19 billion in payments. In

addition, Banking Operations executed

approximately 22,000 wires in the amount of

$157.2 billion. Banking Operating is also

responsible for the activities of the Division’s

custodian bank, including securities delivery

instructions, as well as collection of income and

maturities.

Banking Operations also performs the accounting

and monitoring process for the Collateralization of

Public Deposits program, which provides for the

securing of funds deposited by the State and local

units of government with financial institutions

over and above what is provided by the FDIC. As

of March 31, 2014, Banking Operations oversaw

$9.2 billion in pledged securities and collateral for

$7.9 billion in deposits not otherwise covered by



26

the Federal Deposit Insurance Corporation

(“FDIC”) insurance.

Bank Reconciliation Unit

The Bank Reconciliation Unit is responsible for

reconciling all of the State Treasurer’s bank

accounts. The unit also performs monthly

reconciliation of budgetary control records with

the Office of State Controller.

Statewide Accounting Operations This area manages the accounting for the State

Treasurer’s $100 billion investment pool and

banking programs. It also maintains the general

ledgers for the pension fund, the State Health

Plan for Teachers and State Employees, employee

benefit trust funds and the Escheats Fund, also

known as the Unclaimed Property Fund,

administered by the State Treasurer. The

accounts for the outstanding General Obligation

and Special Indebtedness of the State are

maintained by the Statewide Accounting

Operations area. Functions include the recording

of new debt and the timely payment of principal

and interest for the State’s debt. The area is also

responsible for the financial statement audit of

the NC 401(k) Plan (Supplemental Retirement

Income Plan) and the NC 457 Plan (Public

Employee Deferred Compensation Plan).

Departmental Accounting The Departmental Operations area manages all

fiscal duties that relate to the administration of

the programs of the Department of State

Treasurer. These duties include developing and

monitoring the operating budget for the

Department, preparing payroll for approximately

400 employees and contractors, managing

accounts payable.

Procurement and Contracting Procurement and Contracting is a centralized

function that ensures compliance and consistency

in purchasing and contracting for DST.

Procurement is a specific set of activities

performed in the acquisition of a good or service.

Basic purchasing, procurement by solicitation

(quotes, request for proposals, etc.), leasing and

general contracting activity, including personal

and consultant service contracts is at the core of

an agency’s fiscal responsibilities. The

fundamental responsibility of the Procurement

and Contracting section is the acquisition of goods

and services essential to meet the business needs

of the Department in accordance with North

Carolina law.



27


Initiation of Core Banking System Upgrade In March of 2013, following almost two years of planning, FOD initiated a project to upgrade the State’s Core

Banking system. When completed, Core Banking will be running on the latest supported versions of

FLEXCUBE Universal Banking System (UBS) and Direct Banking (DB). All underlying infrastructure and

supporting software products, such as Oracle WebLogic and Oracle Database will also be upgraded and/or

replaced. As a part of this upgrade, FOD will also be working with the Office of State Controller to replace the

State’s Cash Management Control System (CMCS). CMCS is an aging mainframe application used by the

State to track cash transactions. This functionality will now be made available through the FLEXCUBE

product.

This upgrade is critical to the long‐term stability of the Core Banking system. By upgrading, the State will

have access to the most secure and optimized versions of software produced by Oracle. This will ensure

stable operation and ease of access to qualified vendor technicians in the event of an issue with the system.

At the conclusion of the Core Banking upgrade, DST will be able to adopt a more “hands‐off” approach to the

management of the system, where today, manual intervention in overnight batch processing is required. The

update will also enable new business functionality to support international wire transfers and account

management functions not currently available in the Core Banking system.

Implementation of QEBA Solution for Retirement Accounting Both the Teachers’ and State Employees’ Retirement System (TSERS) and the Local Government Employees’

Retirement System are subject to limits established by the U.S. Internal Revenue Code for benefits payable to

retirees and surviving beneficiaries. The General Assembly has authorized a Qualified Excess Benefit

Arrangement (QEBA) for the payment of benefits in excess of these established limited. Due to the

regulations governing QEBA programs, FOD is required to segment the QEBA accounting and payment

records, since QEBA payments are treated as wages, as opposed to pension benefits, for federal tax

withholding.

DST IT worked with FOD to create a solution for the management of the State’s QEBA program. Through

modifications to Dynamics GP, FOD is able to maintain financial records on the QEBA fund and issue

paychecks to individuals in receipt of QEBA benefits. In July 2014, the first QEBA check was issued to a

member of TSERS. Work will continue through the year to automate the integration with the State’s positive

pay system for warrants, and ultimately, the generation of W‐2 forms and reconciliation of the QEBA funds at

the end of the tax year.



28


Enhance Accountability of Department Services – Procurement and Contract Management FOD has assumed centralized responsibility of all procurement and contracting for the Department of State

Treasurer as part of the integration of the State Health Plan (SHP) into departmental operations. FOD has

been developing policies and procedures for contracting and procurement that address the diverse nature

and needs of the agency. At the same time, FOD requires effective tools to manage departmental contracts

and other artifacts of the procurement process.

FOD assumed operational responsibility for the LibertyNET system used by SHP for the management of

health plan related contracts. Due to the age of the system, the extensive customization performed for SHP,

and the lack of available support from the software vendor, LibertyNET is a poor long‐term solution to meet

departmental needs for procurement and contract management.

Enhance Accountability of Department Services – Expansion of BAI Interchange Currently, FOD is able to monitor account balances held at the six main depository institutions through the

use of a BAI data interchange with Core Banking. BAI is a banking industry standard file format for cash

management balance reporting. FOD also maintains depository relationships with over 20 banks across

North Carolina; however, balance and activity of accounts with these institutions is not managed through an

electronic data interchange.

FOD seeks to expand the use of BAI to include these non‐main banks. This will increase both the volume and

diversity of the data traffic to the Core Banking system, since banks often customize the BAI standard format

specification to their specific needs. Expanding the use and acceptance of BAI to the non‐main banks will

enable FOD to better track account activity, present this activity to customer agencies, and the aid in

compliance reporting activities with more accurate and timely information.

Innovate and Modernize Operations – Investment Accounts Payable Management The Investments Management Division (IMD) is authorized to pay for some expenditures directly from

investment portfolios, rather than the operating budget of the division. This creates a challenge for FOD in

maintaining records of expenditures by portfolio, as these balances and activities are not tracked in the

Statewide accounting systems used for typical accounts payable activity. With increasing scrutiny and

external auditing of investment portfolio activity, it will be incumbent for FOD to maintain accurate records

of portfolio disbursements, as well as produce reports and other metrics of these expenditures upon demand.



29

Current System Portfolio and Operational Activities The FOD Application Portfolio supports the business operations of the division. The following systems are

essential components of normal business operations. A mapping of business processes to systems is provided

in Figure 4 ‐ FOD ‐ System to Business Process Mapping. The 2014‐2018 Application Roadmap for the division is

provided in Figure 5 ‐ FOD ‐ System Roadmap.

Core Banking – FLEXCUBE Universal Banking System (UBS) & Direct Banking (DB)

FLEXCUBE UBS is the primary system used in the State’s banking operation. It is used by staff in Banking

Operations and the Bank Reconciliation Unit. The system manages the demand deposit accounts (“DDA”)

used by all State agencies to intake, hold and disperse funds. The system tracks the daily cash balance of the

State and provides this information to the Investments Management Division for short‐term investment

opportunities. The system is also used in the consolidation and reconciliation of all depository accounts, cash

concentration accounts, and the State’s account with the Federal Reserve Bank (“FRB”). FLEXCUBE was

developed by and is maintained by Oracle Financial Services Software, a division of Oracle Corporation,

formerly an independent company called i‐Flex.

FLEXCUBE DB is the externally‐facing component of the State’s Core Banking system, providing customer

agencies with an online interface to manage account functions. FLEXCUBE DB provides customer agencies

with account balances and account statements, and provides functionality for the stop payment of checks

and the use of positive pay to reduce check fraud. The system provides functions for agencies to transfer

funds in and out of disbursing accounts and to report and transfer collected payroll and sales taxes to the

Department of Revenue.

Business Objects XI

Business Objects XI (“BOXI”) is the reporting toolkit currently used with FLEXCUBE. It provides all

reports for the system, and also generates some agency notices such as account statements and

overdraft notices. BOXI will be supplemented with Oracle Business Intelligence Publisher (“BIP”)

when the Core Banking upgrade project is complete; however, approximately 125 reports will remain

in BOXI until they can be converted for use in BIP.

X9 Image Clearing ‐ Check 21

X9 Image Clearing from AllMyPapers is used by Banking Operations for Check21 processing compliance. The

software receives and processes check files from the Federal Reserve Bank issued by the State Banking

System, imports check image files and provides pay decisions to the FRB based on positive pay records.

Bank Imaging – Unisys InfoImage

Unisys InfoImage is used by Banking Operations for the long‐term storage and retrieval of images of warrants

issued by Core Banking. The system contains over 11 years of check images, previously stored on optical

platters, migrated to an EMC Centera Content Addressed Storage unit in 2010. The system is integrated with

Core Banking to permit Banking Operations staff and client agencies to retrieve images of issued checks in

the FlexCube UBS or FlexCube DB interfaces.



30

Microsoft Dynamics GP

Microsoft Dynamics GP, formerly Great Plains, is an accounting package used by Statewide Accounting and

RSD for general ledger and cash flow management. Accounting entries in Dynamics are recorded from ORBIT

through a data interchange using Microsoft BizTalk. Dynamics GP is also used for the management of the

State’s Qualified Excess Benefit Arrangement (QEBA), maintaining information on fund balances and

providing payroll services for the payment of pension benefits in excess of IRS regulations for 401(a) plans.

LibertyNET – Contract Management

LibertyNET is an electronic document management system used for the management of contracts and other

procurement‐related documentation that originally was implemented by the State Health Plan (SHP)

Division. It is primarily used by staff in the SHP Contracting and Legal Compliance section. The software

manages approximately 39 critical contracts under the SHP administration, along with amendments, side

letters, procurement documentation, and correspondence. LibertyNET was originally developed by Liberty

Information Management Systems and is currently sold and supported by Hyland Software. DST is currently

running version 11, the last released version of the software.



31



DYNAMICS(Purchased)

CORE BANKINGFlexcube UBS(Purchased)

EXTERNAL BANKING Flexcube DB(Purchased)

CHECK 21 (Purchased)

BANK IMAGING(Purchased)

BUSINESS OBJECTS

(Purchased)

Provide DDA and Savings commercial

type Banking functions for agencies

Determine daily availability of funds for

investment

Generate daily tax payment reporting and process tax transfers to Dept of Revenue (DOR)

Upfront consolidation of agency disburing

accounts with positive pay and stop pay

Interface with the FRB for clearinghouse

activities such as pay decisions

Provide banking functions for state agencies including

account statements and check images

Provide limited GL functionality for Accounting and

Banking Operations

Reconcile and balance with data from the NC

Cash Management Control System

Reconcile Depository accounts, Cash Concentration

accounts, Community Bank accounts, the

Federal Reserve account, and

Miscellaneous bank accounts used to hold

funds (external)

Payroll and Sales tax transfers and reporting for agencies to Dept of

Revenue (DOR)

Collect agency interface and pay

information

Agency Funds Transfer functions

On-line banking functions for agency banking customers

Long term research and archive for Federal Reserve

Bank (FRB) financial transactions

Receive and process check files

Generate return image files to the

FRB

Low cost, short term image archive

alternative to FRB image option for pay

decisions.

Check Image archival and retrieval for

NCDST operations via FCC

Check Image retrieval for

agencies via FC@

Long term archive of monthly statements

Provide all reporting functionality for FCC

and FC@.

Generate agency notices such as

overdraft and interest statements

Through custom reports provide error correct and backout procedures for the

larger interfaces

Provide interface functions between FCC and Orbit for

Retirement

Provide monthly account balancing

and reconciliation for Retirement.

Miscellaneous check creation and positive

pay generation for Retirement

Business ProcessesApplications

LIBERTYNET(Purchased)

Route manage Requests to Contract

Maintain electronic copies of contracts,

addenda, side letters, and other contracting

documentation.

Provide reports on contract expiration,

deliverable status, and other contract-related

processes

Figure 4 ‐ FOD ‐ System to Business Process Mapping



32


2014 2015 2016 2017 2018

Financial Operations Division Core Banking - FlexCube FCC Enhance Enhance Maintain Maintain Maintain

Business Objects XI Maintain Replace External Banking - FlexCube @ Enhance Enhance Maintain Maintain MaintainCheck 21 Maintain Enhance Maintain Maintain MaintainBank Imaging - Unisys InfoImage Maintain Enhance Maintain Maintain MaintainLibertyNET Contract Management System Maintain Maintain Replace

Figure 5 ‐ FOD ‐ System Roadmap



33


Complete Core Banking Upgrade and Implement Cash Management Functionality In March of 2014, DST initiated an upgrade of the Core Banking system, scheduled for completion in May of

2015. When complete, all functionality in the current version of Core Banking will be ported to the latest

version of FlexCube.

FOD has completed the development of functional specifications for the new Core Banking system, and

Oracle has started work to customize the FLEXCUBE software to meet the specific needs of the State.

Representatives from Oracle have worked with DST IT staff to construct new environments to host the Core

Banking system. These environments make use of virtualization technology, as opposed to relying

completely on physical hardware, which will aid in disaster recovery and continuity of business operations.

The base FLEXCUBE installation in underway and the customizations to the software are expected to be

delivered to FOD in 3Q 2014. The remainder of the year will focus on testing, data migration, and training for

staff.

When the Core Banking System is successfully upgraded, the Oracle project team will shift to the

implementation of cash management functionality in FLEXCUBE to replace the State’s CMCS application.

Representatives of Oracle will work with the Office of the State Controller (OSC) to finalize requirements for

customization and configuration of the FLEXCUBE Cash Management module. DST IT and FOD will ensure

that changes made to the environment do no negatively impact the operation of the Core Banking system.

Following development, testing and migration of existing data, and training for OSC and agency users, the

complete project is expected to conclude in January of 2016.

Upgrade to Bank Imaging System The Unisys InfoImage system will require a maintenance upgrade in 2015. This will be necessary to maintain

operability with the latest releases of Microsoft Windows Server and Microsoft SQL Server. At the conclusion

of the Core Banking upgrade, DST IT will contract with Unisys to assist with an upgrade of the current

environment. Due to the integration with Core Banking, regression testing will be necessary to ensure check

images can continue to be delivered through the FLEXCUBE interface. This project, expected to commenced

in 2Q 2015, should be concluded by the end of that year.

Replacement of LibertyNET with Agency‐Wide Procurement Management System The DST IT division will work with FOD to identify and select an appropriate replacement for the legacy

LibertyNET system. The new solution must be sized to handle the content load of procurement for the entire

department, not just one division. At the same time, the system must be configurable to support the new

policies and procedures developed by FOD for contract management. Lastly, a migration of existing data and

artifacts from the legacy LibertyNET system to a new solution must be achieved before the LibertyNET

system can be retired.

Although there have been discussions regarding the development of a Statewide contract management

system integrated with e‐Procurement, this system has not been made available. While this would be an ideal

solution, if it is not offered soon, DST will be forced to act due to the tenuous condition of LibertyNET. Absent

a Statewide system, beginning in 2Q 2015, DST IT will work with FOD to develop an RFP for a competitive

procurement of a contract management solution. DST IT will be seeking a product that meets FOD’s process

requirements, but can also be integrated into the department’s existing SharePoint environment or be



34

delivered in a Software‐as‐a‐Service (SaaS) model. DST IT is targeting completion of this initiative at the end

of 2Q 2016.

Accounts Payable Management System for Investment Portfolios DST IT will work with FOD to identify and select a tool to streamline the disbursement of funds from

investment portfolios to vendors. This system should include the ability to track and report expenditures by

portfolio, vendor, or other categories defined by FOD. The system should also include a check production

feature. Due to the commonality with some of the functionality of Dynamics GP as used by FOD, Dynamics

will also be considered for this purpose. Work on this initiative is anticipated to begin in 3Q 2016, at the

conclusion of the Core Banking Upgrade, Bank Imaging Upgrade, and the implementation of a new

departmental contract management solution.



35

Figure 6 ‐ FOD ‐ 2015‐2017 Strategic IT Initiatives

Financial Operations Division – 2013‐2015 Strategic Information Technology InitiativesBank Im

aging

Upgrade

Core Banking Upgrade

Departmental

Contract

Mana

gement Tool

Investment

Portfolio Accounts

Payab

leJan 2016‐Jun‐2016Jun 2014‐ Dec 2014 Jan 2015‐Jun 2015 Jul 2015 ‐ Dec 2015

Customization of FlexCube,

Installation & User Training

Formal User Acceptance Testing

Agency Training on FlexCube DB

Complete Implementation – Migrate Production

Data

Definition of OSC Requirements for Cash Management

Customization of FLEXCUBE Cash Management

Module

User Training and Formal Testing of Cash Management

Agency Training on CMCS Module


Data

Conduct Bank Imaging Upgrade

Define System Requirements

Draft and Release RFP

Evaluate Proposals and Select Vendor

Implement SystemConduct Data Migration

User TrainingComplete

Implementation

Define System Requirements & Conduct Gap

Analysis


36

Investment Management Division



37

Overview

The Investment Management Division (“IMD”)

serves as the investment arm for the Department

of State Treasurer. This Division employs more

than 20 investment professionals who provide the

expertise for state government investing. IMD is

responsible for the management of the Cash

Management Program, the Pension Fund

Investment Program (“Pension Fund”), and the

Ancillary Investment Programs. At the end of the

fiscal year ending June 30, 2013, total assets of

these programs were $93.73 billion.

The Treasurer is directed by statute to establish,

maintain, administer, manage and operate

investment programs for all funds on deposit,

pursuant to the applicable statutes. In doing so,

the Treasurer has full powers as a fiduciary and,

with the Investment Team, manages the

investment programs so assets may be readily

converted into cash when needed.

In establishing the comprehensive management

program, the State Treasurer, utilizing a

professional investment staff, has developed an

investment strategy for each portfolio that

recognizes the guidelines of the governing

General Statutes and provides appropriate

diversification. In addition to the Treasurer and the

Investment team managing these programs, the

Investment Advisory Committee (“IAC”) provides

opinion on policies and general strategy for

achieving investment of the pension fund,

including asset allocation, in consultation with

IMD staff.

Cash Management Program The Cash Management Program’s objective is to

maximize income consistent with the principles of

preservation of capital and liquidity. This program

includes state bank deposits overseen by the

Department of State Treasurer as the State’s

banker.

Short‐Term Investment Fund

The Short‐Term Investment Fund (“STIF”)

comprises 99.68 percent of the Cash Management

Program. The Bond Proceeds Fund, managed by

Sterling Capital, accounts for 0.32 percent of the

Program.

The STIF is an internally managed portfolio of

highly liquid fixed income securities. These

securities are primarily money market instruments

and short‐ to intermediate‐term U.S. Treasuries

and Agencies. All bank accounts of the State

Treasurer are included in this portfolio, which

serves as the main operating account for state

agencies. Because the Treasurer’s cash balances

are ultimately subject to disbursement upon

presentation of valid warrants, the primary

consideration in making investments is safety and

liquidity; the secondary consideration is income.

For the fiscal year 2013, the STIF generated a cash

return of 0.44 percent.

Pension Fund Investment Program The Investment Management Division’s goal is to

maintain the long‐term strength of the retirement

systems by providing a consistent long‐term

actuarial rate of return while simultaneously

minimizing risk in the portfolio. The portfolio

contains long‐term investments in stocks, bonds,

real estate, private equity, hedged strategies,

credit strategies and inflation protection. The

Division conducts its activities in accordance with

the Statement of Investment Policy approved by

the Treasurer in consultation with the Investment

Advisory Committee. This policy covers fiduciary

standards of care, asset allocation ranges,

rebalancing processes and other issues.

North Carolina is consistently ranked in the top

five of state retirement funding ratios. The

tradition of conservative fiscal management has



38

served North Carolina’s public workers and

taxpayers well throughout the years. The pension

fund continues that tradition with a significant

allocation in fixed income assets (bonds)

combined with reasonable exposure to more

volatile growth‐oriented assets and an

increasingly diversified portfolio. The result of this

strategy is a fund that is a top performer in

turbulent economic and financial market

environments, but lower returns than the typical

large public fund peer in bull markets.

Corporate Governance The Department of State Treasurer maintains a

corporate governance program to enhance long‐

term shareholder value. The pension fund works

through proxy voting, shareholders resolutions,

dialogue with corporate leaders and regulatory

agencies, and collaboration with other

institutional investors to create long term value

for portfolio companies.

Ancillary Investment Program The Ancillary Investment Program’s objective is to

generate returns that match or exceed those of

the appropriate benchmarks over a three‐ to five‐

year basis for the Escheats Fund, Public Hospital

Funds, the Local Government Other Post‐

Employment Benefits Program, and other non‐

pension assets invested in the core fixed income

portfolio.



39


Enhancements to Analytic Capabilities Over the last few years, IMD has made a number of advancements in their risk management capabilities.

First, the division has been working with the SAS Institute on the development of a total portfolio risk analysis

tool. This tool incorporates data feeds from vendor partners of IMD, such as BNY Mellon. By collecting and

aggregating data about the entire portfolio, the tool enables comprehensive risk analysis and modeling

across different asset classes and overall improve investment performance.

At the same time, IMD has started to make use of MatLab for analytics in the Credit and Inflation‐Sensitive

portfolios. They are also considering expanding use of this tool to conduct macro‐economic forecasting and

modeling. By conducting in‐house analysis on global economic conditions, Portfolio Managers will have

access to information to make better decisions around investment strategies. An expansion of in‐house

analytics will also allow Portfolio Managers an opportunity to request directed, on‐demand research on

special topics or issues. This ability to provide rapid and meaningful analysis will also improve investment

decision making, yielding positive benefits for managed assets.

Sourcing and Implementation of Portfolio Manager Relationship Management System The management of communication activity with external fund managers has been a difficult challenge for

IMD. No single comprehensive method existed to maintain the records of all the phone calls, discussion

notes, e‐mails, letters, documents, and other communication with external fund managers. The information

was kept in a disbursed fashion, some electronic and some physical, and it could not be easily searched or

aggregated. Producing a comprehensive record of communication is important to continuity of the

relationship between IMD and an external manager in the event of staff turnover. The aggregated record of

communication is also an important artifact that can be used to provide transparency into IMD’s business

relationships.

Working with DST IT, IMD issued an RFP for a portfolio manager contact management system in later 2013.

The division selected Backstop, a software‐as‐a‐service solution that could be quickly implemented with little

demand on IT resources. The system was quickly brought online and within a couple of months, all key

contact information was placed in Backstop, allowing IMD staff to begin tracking future communication with

fund managers while historic information was collected and digitized for inclusion in the system. Training was

conducted for IMD staff and was placed into production in Sept. of 2014 while historic documents continue to

be loaded into the system. Training was also provided for IT staff on the use of Backstop’s API; this

programmable interface will allow DST IT to extract information from the Backstop repository for backups

and/or further analysis by IMD management and staff.

Document Digitization and Publication For many years, IMD has been digitizing information; however, it has been stored in a semi‐structured format

on file shares and sometimes, individual computers. At the same time, IMD maintained volumes of critical

documents in physical format in file cabinets and binders throughout their building. In both cases,

information was difficult to find and collect, and in the case of physical documents, was at risk of destruction

or loss.



40

IMD has initiated a project to digitize and organize their most crucial information – a project that has

numerous benefits and applications. First, with the introduction of the Portfolio Manager Relationship

Management System, digital documents related to a particular fund manager can be stored with the contact

information, allowing rapid and more structured access to key documents based on IMD relationship with

particular firm. Second, key legal documents, in addition to being scanned and organized in Backstop, have

also been stored in the DST SharePoint environment. While this effort duplicates some of the storage used by

Backstop, the redundancy is important due to the criticality of the documents. The SharePoint storage also

allows the DST Legal Section access to key legal documents and contracts without needing access to

Backstop, a tool primarily used by Portfolio Managers. Lastly, the digitization of documents has allowed DST

to make more information available regarding public investments, an important transparency initiative.

Notably, DST has made available on NCTreasurer.com, the department’s public website, copies of placement

agency disclosure letters. These documents detail the relationships between placement agents, who market

investment opportunities, and the fund managers who make use of placement agents to present

opportunities to the Department of State Treasurer.



41


Provide Public Leadership in Finance, Fiscal and Health Policy – Macro‐Economic Forecasting and

Modeling Research and information are critical to sound investment decisions. Achieving portfolio performance targets

requires an understanding global economic conditions and their potential impact on new or existing

investment opportunities. Given the rapidly changing nature of both global conditions and investment

opportunities, IMD cannot afford to solely rely on external research. Internal forecasting and modeling can be

tailored specifically around the State of North Carolina portfolio of assets, it can produced quickly to meet the

demands of Portfolio Managers, and it can provide IMD with a competitive advantage in the investment

marketplace with insights and information that may not be widely available or distributed.

Continuing to develop IMD’s analytics capability will be a critical activity over the next two years. Already

making use of SAS for Risk Analytics, and MatLab for Portfolio Analytics, IMD will seek to expand their

macroeconomic forecast capabilities. IMD is currently working with investment managers to evaluate the

tools they are using and assess their suitability for use by DST. As IMD seeks to expand the use of existing

tools and introduce new tools into the IT environment, DST IT will serve an important role in supporting

technologies used to collect, aggregate, analyze and report data.

Provide Public Leadership in Finance, Fiscal and Health Policy Services – Total Portfolio Analytics The portfolio managed by IMD is distributed across six different asset classes: Fixed Income, Global Equity,

Private Equity, Credit, Inflation‐Sensitive, and Real Estate. It is imperative that IMD not only analyze the

portfolio at the asset allocation level, but examine the entire portfolio for measure of performance, risk

sensitivity, or other metrics. This type of analysis presents a data management challenge, since information

must be gathered from many diverse sources and systems and aggregated to allow for total portfolio

analysis. IMD’s partnership with the SAS Institute on the development of a risk analytics tool involves the

collection and aggregation of data for risk modeling at both the asset class and total portfolio level. IMD will

need to make use of more tools and technologies to conduct this type of complete portfolio analysis to

ensure a robust overall investment strategy that meets performance targets.

Innovate and Modernize Operations – Tracking of Investment Manager Evaluation Processes While the Fixed Income investment portfolio is internally managed, IMD has relationships with approximately

225 investment advisors and funds for the management of all other asset classes in the overall portfolio. The

selection of an investment advisor or fund is an arduous process. IMD is continually approached with

investment opportunities and IMD staff conduct thorough analysis and detailed research into any opportunity

before committing funds. This due diligence process is a critical component of sound investment practice and

it is imperative that IMD have tools to capture all the details and artifacts of this process. A central repository

for tracking the evaluation of investment managers will allow IMD management to see progress related to

ongoing due diligence activities and repository of due diligence artifacts will allow for quick access during

decision‐making processes and aid oversight to ensure appropriate material has been provided to IMD.



42

Current System Portfolio and Operational Activities IMD’s Application Portfolio supports the business operations of the division. Unlike most of the other

divisions in DST, due to varied asset classes under management, IMD does not have a single line‐of‐business

application. Most of the systems listed below are applications hosted by a financial service provider and made

available to the division by virtue of a financial management relationship, as with BNY Mellon Workbench and

the State’s custodial agreement, or by the very nature of the investment and finance industry, as with

Bloomberg and the trading of fixed income securities.


processes to systems is provided in Figure 7 ‐ IMD ‐ System to Business Process Mapping. The 2014‐2018

Application Roadmap for the division is provided in Figure 8 ‐ IMD ‐ System Roadmap.

BNY Mellon Workbench BNY Mellon Workbench is the primary interface to BNY Mellon, the custodian of the State’s investment

portfolio. Workbench provides access to all information on the portfolio, including performance reporting,

financial statements, and real‐time custodial actions such as client wire transfers, corporate actions, and

trade actions. Almost all personnel involved in investment activities, including personnel in Banking

Operations and Financial Operations, have access to BNY Mellon Workbench for reporting, reconciliation,

and/or analysis purposes.

Bloomberg Research and AIM Bloomberg Asset and Investment Manager System (“AIM”) is a tool used by the Fixed Income team to

manage the order execution of securities. Both the Fixed Income team and the Global Equity team use

Bloomberg for research purposes. The AIM system enforces a workflow for trade orders that requires

different employees to authorize and execute each trade order. The system can also produce historical

information on open and completed orders, as well as information on the holdings of the fixed income

portfolio. The holdings data from the Bloomberg system can be used to reconcile the holdings information

maintained in BNY Mellon Workbench as well as the holdings information stored in PORTIA.

Use of the AIM system requires a special keyboard from Bloomberg, equipped with a biometric thumbprint

reader, which authenticates users for access to the order management system. In the absence of the

biometric‐enabled keyboard, a handheld biometric device supplied by Bloomberg can be used to permit

access to the order management system, facilitating remote access to AIM.

PORTIA PORTIA is a fund accounting system developed by Thomson Reuters. It is used by the Fixed Income team as

an alternative method to BNY Mellon Workbench and Bloomberg AIM for tracking fixed income holdings in

the STIF and the LTIF. BNY Mellon Workbench can provide transaction information since BNY Mellon

assumed custodial duties for the State; however, PORTIA contains transaction information back to 1997,

reflecting periods served by other custodians, such as State Street. PORTIA is also the only tool that can be

used to report daily holdings in perpetuity; daily holding information is not available in Bloomberg prior to the

AIM implementation.



43

Each fixed income transaction is entered into PORTIA. Each day, a file of current holdings is generated from

PORTIA and uploaded to HubData, a securities pricing data aggregator. The pricing information returned

from HubData is loaded back into PORTIA and compared against valuation statements available in Mellon

Workbench. Once a month, factor information for mortgage‐backed securities in PORTIA is retrieved from

the Government National Mortgage Association (“GNMA”) and compared to the pricing information

provided by BNY Mellon.

In addition to information on fixed‐income holdings, PORTIA also contains some historical portfolio data for

other asset classes. PORTIA is a traditional client‐server application, hosted completely on DST equipment.

CMS BondEdge CMS BondEdge is a portfolio analytical tool developed by Interactive Data Group and used by the Fixed

Income team. BondEdge accepts a feed of data related to holdings, either actual or hypothetical, and permits

the user to perform scenario modeling, benchmarking, and cash flow analysis of the portfolio. The client

software requires the use of a hardware “dongle”, a device that must be plugged into the USB port of the

client machine to permit access to the software. The dongle is required when more than one user will access

the system; IMD currently uses two hardware dongles permitting two individuals to access the system

simultaneously.

Grosvenor Capital Management FundCentral FundCentral is an online tool hosted by Grosvenor Capital Management (“GCM”) for the purposes of

managing private investments for private equity and real estate. It is used primarily by Operations and the

private asset class groups. The FundCentral system contains information on the individual holdings of a

limited partnership and this information can be used for portfolio analysis and reporting. FundCentral

contains information from the GCM Customized Fund Investment Group (“CFIG”). CFIG reviews private

equity investment funds, performs due diligence on select funds, and co‐invests with its advisory clients. CFIG

has a significant investment relationship with the State of North Carolina. As a result of this relationship with

IMD, FundCentral is made available at no additional cost to IMD.

Burgiss Group Private i Private i is an investment management and performance analysis tool developed by The Burgiss Group. Like

FundCentral, it is used primarily by Operations and the private asset class groups to track investments made

in the private equity, real estate, credit, and inflation‐sensitive asset classes. Private i contains a database of

the division’s private equity and real estate partnership agreements. Each month, the valuations of the

private equity investments from BNY Mellon are loaded into Private i for the purpose of performance analysis

and reporting. Private i provides summary information about a fund, but does not track the individual

investments within a fund. Information regarding specific investments within a partnership is tracked using

GCM FundCentral and Burgiss Private Informant. The Burgiss Group offers a web‐based, hosted version of

Private i.

Burgiss Private Informant Private Informant is another software package offered from The Burgiss Group. Private Informant is a web‐

based portfolio management tool and is not hosted on DST equipment. The software allows for the tracking

of individual holdings by a partnership company, while Private i manages the overall valuation of a fund and



44

the individual holdings. Private Informant is used primarily by the operations and private asset class groups to

track underlying holdings information.

Private Informant is also provided to IMD as a part of the custodial agreement with BNY Mellon. Much of the

information in Private Informant is similar to the information in GCM FundCentral; however the division uses

both products since they are afforded flexibility to customize FundCentral by GCM and both systems can be

used as sources to reconcile holdings.

TradeWeb and MarketAxess TradeWeb is an online marketplace for the trading of fixed income securities such as US Treasury Bonds and

the bonds of various government agencies. MarketAxess is another electronic trading platform for corporate

bonds. Both platforms provide access to broker‐dealers and facilitate trading for the fixed income portfolios

and government agencies. While AIM serves as an order management system, providing an oversight

framework and the method to communicate transactions for settlement to the custodian, TradeWeb and

MarketAxess are the tools where trades are actually executed by the Fixed Income team.

SAS Risk Analytics SAS Risk Analytics is a custom solution constructed for IMD by the SAS Institute. The system contains risk

and performance measurement models for fixed income equity, private markets, hedge funds, and other

funds. It also provides specific reports and dashboards for pension fund portfolio management. It contains

data management and workflow processes specific to pension fund assets, and integrates third‐party

benchmark and market data related to pension funds. The portfolio and market data are hosted at the SAS

Analytics Lab for State and Local Government.

Matlab Matlab is a numerical computing environment and programming language developed by MathWorks. Matlab

includes a number of computational libraries that can be developed for use in portfolio analysis and

optimization, simulation, investment selection, and price modeling. Matlab is currently used in the

management of the Credit and Inflation‐Sensitive Portfolios and is being investigated as a tool for us in

macroeconomic modeling.



45



PORTIA SYSTEM(Purchased)

Validate Custodian Statement against

Internal Trade Records for Fixed

Income

Record Cash Transactions for

Investment Funds

Reconcile Pricing for MBS

BLOOMBERG RESEARCH and

AIM(Purchased)

Manage Fixed Income Transactions

CMS BOND EDGE SYSTEM

(Purchased)

Perform Fixed Income Portfolio

Analytics

PRIVATE I(Hosted by Burgiss

Group)

FUNDCENTRAL(Hosted)


Conduct Investment Research

Perform Real Estate and

Private Equity Fund Analysis

and Performance Reporting

Perform Private Equity and Real Estate Analysis


PRIVATE INFORMANT(Hosted)

Perform Real Estate Investment

Analysis and Performance

Reporting

BNY MELLON WORKBENCH

(Hosted)

Manage Custodian Account

PortfolioPerformance

Reporting

Transaction Reconciliation

TRADEWEB(Hosted)

Online Trade Platform for Fixed

Income

MarketAxess(Hosted)


Income

Matlab(Purchased)

SAS Risk Analytics(Hosted)

Credit and Inflation Analytics

Total Portfolio Risk Analytics and Modeling

Figure 7 ‐ IMD ‐ System to Business Process Mapping



46


2014 2015 2016 2017 2018Investments Management Division

Bloomberg AIM Maintain Maintain Maintain Maintain Maintain Bloomberg Research Maintain Maintain Maintain Maintain Maintain CMS BondEdge Maintain Maintain Maintain Maintain Maintain Private i Maintain Maintain Maintain Maintain Maintain PORTIA Maintain Maintain Maintain Maintain Maintain Private Informant Maintain Maintain Maintain Maintain Maintain BNY Mellon Workbench Maintain Maintain Maintain Maintain Maintain MarketAxess Maintain Maintain Maintain Maintain Maintain TradeWeb Maintain Maintain Maintain Maintain Maintain SAS Portfolio Risk Analytics Enhance Enhance Maintain Maintain Maintain Matlab Enhance Enhance Maintain Maintain Maintain Backstop CRM Enhance Maintain Maintain Maintain Maintain

Figure 8 ‐ IMD ‐ System Roadmap



47


Enhance Reporting of Investment Performance and Issue Financial Statements Under new legislative requirements, IMD will be issuing annual financial statements related to the Retirement

Systems investment programs. These financial statements will be audited by a commercial, independent

third‐party firm. In additional to this new requirement, IMD will also be required to produce new reports

regarding investment performance. Among these reports, IMD will be required to produce and make public a

report detailing the fees and performance of all external fund managers utilized for pension investments. This

report must contain investment valuations, rates of return, and management and incentive fees paid.

Although this information is available today, IMD, along with the Department’s Financial Operations Division,

will require new tools and technologies to maintain it in a comprehensive, aggregated format for statement

production, reporting, and auditing. The new legislative requirements are in effect for the 2014‐2015 fiscal

year and building the technology capacity to meet these requirements is imperative. DST is investigating how

best to meet these requirements and DST IT will support all efforts to procure and implement necessary

tools. This work is expected to commence immediately, and continue through the end of 2Q 2016, the end of

the 2015‐2016 fiscal year.

Leverage Third‐Party Automation Tools for Manual Processes Currently, IMD utilizes manual processes for a number of investment functions. Notably, the execution of

trade tickets, the recording of cash receipts, and the distribution of cash holdings involve the physical routing

of forms and documents. In addition to being inefficient, these processes also create a large volume of

physical records that must either be retained in physical form or converted to digital format for preservation.

IMD is interested in utilizing third‐party tools to automate some of these processes. From routing and

electronic approvals, to digital archiving, tools for process management would increase operational efficiency

and reduce the burdens associated with archive management and retrieval. As IMD expands their internal

investment management to include portions of the global equity portfolio, the importance of automation

systems increases due to the expected growth in the volume of documents associated with current processes.

IMD will partner with DST IT to evaluate and procure tools and technologies for process automation. This

work is expected to commence in 3Q 2015.

Internal Management of Publicly Traded Investments – Global Equity Index Positions IMD is seeking to implement an electronic platform for global equity trading. By actively managing a portion

of the global equity portfolio in‐house, the division will be able to save on management fees and the pension

fund will be able to derive a greater benefit from positive returns. The implementation of a trading platform

will likely involve special hardware and routing devices, much like the implementation of Bloomberg currently

in‐place for the fixed income asset management group. DST IT will partner with IMD in the evaluation of

platforms and implementation planning to achieve a secure and cost‐effective solution to permit global

equity trading.



48

Investment Management Division – 2015‐2017 Strategic Information Technology InitiativesProce

ss

Auto

mation

Rep

orting an

d Financial

Statements

Global Equ

ity

Trading

Platform


Identify Tools for Financial

Statements

Procure and Implement

Issue Financial Statement

Identify Tools for Detailed Reporting


Issue Detailed Report

Improve and Enhance Processes

and Tools



Identify Tools for Process Automation


Identify Tools for Global Equity

Trading


Figure 9 ‐ IMD ‐ 2015‐2017 Strategic IT Initiatives


49

State and Local Government Finance Division



50

Overview

The State and Local Government Finance Division

(“SLGFD”) handles the sale and delivery of all

State and local debt and monitors the repayment

of State and local government debt. Staff counsel

assists local governments in determining the

feasibility of projects, the size of the financing,

and the most expedient form of financing.

Additionally, SLGFD monitors and analyzes the

fiscal and accounting practices of all local

governments.

SLGFD comprises the Debt Management section,

which issues and monitors all State and local debt,

and the Fiscal Management section, which

monitors fiscal and accounting standards for local

governments. SLGFD also provides the State

Treasurer, the Local Government Commission, the

North Carolina Capital Facilities Finance Agency,

and the North Carolina Infrastructure Finance

Corporation with staff assistance in fulfilling their

respective statutory functions.

History In 1931, the North Carolina General Assembly

established the Local Government Commission

(“LGC”), staffed by this Division, to help address

the problems in local government finance caused

by the Depression. In 1933, 62 North Carolina

counties, 152 cities and towns, and some 200

special districts were in default on the principal or

the interest or both of outstanding obligations.

The debt of North Carolina’s local governments in

general finds a significantly better reception on

the national bond markets than the national

average. Many attribute this favored credit status,

in part, to the work of the LGC. This Commission is

unique nationally and is often referred to as a

model for local government financial oversight.

The Local Government Commission

The LGC, established by G.S. 159‐3, provides

assistance to local governments and public

authorities in North Carolina. It is staffed by the

Department of State Treasurer and approves the

issuance of debt for all units of local government

and assists these units with fiscal management.

The Commission is composed of nine members:

the State Treasurer, the Secretary of State, the

State Auditor, the Secretary of Revenue, and five

others by appointment (three by the Governor,

one by the General Assembly upon the

recommendation of the President Pro Tempore,

and one by the General Assembly upon the

recommendation of the Speaker of the House of

Representatives). The State Treasurer serves as

Chair and selects the Secretary of the

Commission, who heads the administrative staff

serving the Commission. The General Statutes

require the Commission to meet at least quarterly.

As a matter of practice, the Commission meets on

the even months, and the Commission’s executive

committee meets in the odd months.

NC Capital Facilities Finance Agency

Private colleges, universities, nonprofit and for‐

profit corporations providing certain services may

receive financing assistance through bonds issued

by the North Carolina Capital Facilities Finance

Agency (“NCCFFA”), established by the General

Assembly in 1986. The Board of Directors is

composed of seven members: the State Treasurer,

the State Auditor, and five others by appointment

(three by the Governor, one by the President Pro

Tempore of the Senate and one by the Speaker of

the House of Representatives). The administrative

staff for the NCCFFA is provided by the

Department of State Treasurer. The NCCFFA

meets monthly.

Following initial contact from an applicant, the

staff generally begins the process of determining

project feasibility and desirability with a

preliminary conference. Upon receipt of an

application, financial capability and responsibility



51

is reviewed through ratio and trend analysis. The

staff presents the project and its

recommendations to the NCCFFA board and

subsequently to the LGC for approval. Since its

creation, the NCCFFA has provided over $6.1

billion in tax‐exempt capital financing. At June 30,

2014, there were $3.1 billion in outstanding

obligations. Each issue is payable solely from

revenues derived from each entity financed, is

separately secured, and is separate and

independent from all other series of bonds as to

source of payment and security. During the fiscal

year ended June 30, 2014, the NCCFFA issued

$150.1 million in bonds for five institutions. The

NCCFFA annual report is available from the

Department of the State Treasurer.

Debt Management The State and Local Government Finance Division

issues and monitors all State debt, including debt

secured by a pledge of the taxing power of the

State and debt for which repayment is subject to

appropriation. With the assistance of other State

agencies, SLGFD determines the cash needs, plans

for the repayment of debt (maturity schedules)

and schedules the sale at the most appropriate

time. An official statement describing the issue

and other required disclosures about the State is

prepared with the advice and cooperation of bond

counsel. Finally, SLGFD handles the actual sale

and delivery of the debt, maintains the State bond

records and register of bonds, and monitors the

debt service payments. At June 30, 2014, the State

had General Obligation bonds outstanding of

approximately $3.6 billion and certificates of

participation, limited obligation bonds and lease‐

purchase bonds outstanding of approximately

$2.4 billion.

SLGFD also is responsible for the authorization

and sale of revenue bonds for the North Carolina

Medical Care Commission, the Municipal Power

Agencies, the North Carolina Capital Facilities

Finance Agency and the North Carolina Housing

Finance Agency. Only the specific revenues

pledged for payment secure these bonds. The

staff works with the personnel of these agencies in

determining the feasibility and scheduling of the

bond offerings, in structuring the issues and the

underlying security documents, and in preparing

the data that must be presented to the LGC for its

approval.

SLGFD assists the State Treasurer in representing

the State in all presentations to Moody’s Investors

Service, Inc., Standard and Poor’s Corporation and

Fitch Ratings, Inc., the three national bond rating

agencies used by the State and local

governmental units in North Carolina. At June 30,

2014, the State had a “Triple‐A” rating, the highest

rating attainable, from all three national rating

agencies. Only ten other states enjoyed this

distinction. These ratings have enabled the State

to sell its bonds at interest rates considerably

below the Bond Buyer’s Index, thereby providing

tremendous savings to North Carolina’s taxpayers.

In addition, SLGFD staffs the State’s Debt

Affordability Committee and drafts an annual

Debt Affordability Study, which provides the

General Assembly with an overview of the State’s

debt load and borrowing capacity. The February 1,

2014, study determined that the State’s annual

General Fund debt capacity was approximately

$570 million in fiscal year 2014. The Study also

provided an estimate of the annual debt capacity

for the transportation funds (the State Highway

Fund and Highway Trust Fund) and determined

that there is currently $209 in transportation debt

capacity in fiscal year 2014.

The other primary function of SLGFD is the

approval, sale and delivery of all North Carolina

local government bonds and notes. This includes

the sale of revenue bonds, which are secured only



52

by specific revenue pledged in payment of the

bonds. SLGFD staff counsel and assist local

governmental units in determining the necessity

of a project, the size of the issue, and the most

expedient form of financing. A review is made of

the debt management policies of the unit, the

effect of the financing on the unit’s tax rate and

the unit’s compliance with the Local Government

Budget and Fiscal Control Act. Sale dates are

scheduled depending on the need for the money,

the anticipated interest rates and the most

favorable times bonds can be sold with a minimum

of competition. The staff strives to resolve all

problems and to determine that all statutory

requirements are met before applications are

presented to the LGC for approval.

Debt records are maintained for all units on

principal and interest payments coming due in the

current and future years. All debt service

payments are monitored through a system of

monthly reports. At June 30, 2014, authorized and

unissued general obligation bonds for local

governments and authorities amounted to $4.3

billion and general obligation debt outstanding

amounted to $9.5 billion.

Another responsibility of the SLGFD staff is

assisting units that desire to enter into

agreements to finance the lease or installment

purchase of capital assets. Before approving such

agreements, the LGC must find that the proposed

project is necessary and expedient, the proposed

undertaking cannot be economically financed by a

bond issue, and that the contract will not require

an excessive increase in taxes. During the fiscal

year ended June 30, 2014, the LGC approved

contracts or other agreements (including re‐

fundings) totaling $1.1 billion.

Staff continues to perform several tasks to ensure

compliance with various requirements of the

Internal Revenue Service, Securities and Exchange

Commission and other regulatory agencies,

relating to the ongoing management of tax

exempt debt, which includes monitoring, arbitrage

rebate compliance, preparing and filing secondary

market disclosures information and other post

issuance compliance duties. Staff also prepares

information for use by the General Assembly,

bond counsel and other outside finance and legal

professionals.

Fiscal Management Another function of SLGFD involves monitoring

certain fiscal and accounting standards prescribed

for local governmental units by the Local

Government Budget and Fiscal Control Act. The

Act requires each unit of local government to have

its accounts audited annually by a Certified Public

Accountant or by an accountant certified by the

Commission as qualified to audit local government

accounts. As a part of its role in assisting local

units and monitoring their fiscal programs, SLGFD

provides guidance in following generally accepted

accounting principles. Each local government is

required to file a copy of its annual audit report

with SLGFD and submit all audit invoices for

approval.

The staff of the Fiscal Management Section

annually reviews the audited financial statements

of approximately 1,260 local governments and

public authorities. The staff determines that all

reports are prepared in accordance with generally

accepted accounting principles and that applicable

auditing standards have been followed. The staff

also reviews the audit report to evaluate the

financial condition of the unit, to determine if the

unit complied with the Local Government Budget

and Fiscal Control Act and other State laws, and to

determine if the unit has an adequate system of

internal controls in place. As a part of the audit

review process, staff reviewed approximately 572

single audits and approximately 261 “Yellow



53

Book” audits to ensure that audits performed

under Government Auditing Standards (the

“Yellow Book”) and the federal and State single

audit acts meet all the federal and State

requirements.

When SLGFD staff note problems, local

governments and public authorities, as well as

their independent auditors, receive written

communication expressing the staff’s concerns,

suggestions for improvements and an offer of

assistance. On behalf of the LGC, staff requests a

response detailing the unit’s plans to take

corrective action. In fiscal year 2013‐2014, staff

sent approximately 333 audit letters to units of

local government.

In providing assistance to local governments, units

are counseled in accounting systems and internal

controls, cash and investment management,

budget preparation, risk management, capital

planning and changes in laws and regulations.

Educational programs in the form of seminars and

classes are also provided in order to accomplish

these tasks. Staff members make presentations

throughout the year at various workshops

sponsored by:

North Carolina Association of School

Business Officials

North Carolina Government Finance

Officers Association

North Carolina Local Government

Investment Association

North Carolina Rural Economic

Development Center, Inc.

North Carolina League of Municipalities

North Carolina State University MPA

Program

UNC School of Government

Cherry, Bekaert, LLP



54


Enhancements to AFIR Presentation and Collection Each year, municipalities and counties are asked to provide fiscal data that is used by both the Federal and

State governments to analyze the funding and operation of local governmental units. This data collection,

the Annual Financial Information Report (AFIR), was managed by SLGFD through the collection and

aggregation of over 1,000 Excel spreadsheets provided by local units. In 2012, the US Census Bureau, as part

of a multi‐state data collection initiative, began to collect all county and municipal financial data previously

collected by the SLGFD for the AFIR. This data collection is conducted via a web interface and all North

Carolina data is forwarded to SLGFD in electronic format. This partnership with the US Census Bureau has

greatly reduced the data collection and management burden of the division.

As an extension of this initiative, DST IT coordinated with SLGFD to load the data supplied by the US Census

Bureau into a data reporting repository for internal use and publication on the DST public website,

NCTreasurer.com. Working with SLGFD, DST IT completely redesigned the reporting interface which

previously relied upon the generation of thousands of static web pages housing the AFIR data. The new

reporting interface makes use of SQL Server Reporting Services and permits more interactive selection of

data for reporting, as well as the download of data for offline analysis and use.

Completed Implementation of New Audit Management System In 2011, SLGFD procured a new audit management solution to replace an 11‐year‐old system constructed

from outdated technology. The review of local unit audit reports for FY2012 was the first major production

use of the system and from August 2012 through the February of 2013, SLGFD utilized the new system to

record financial information for over 1,000 local government units, as well as store electronic copies of the

submitted financial statements. As part of the implementation, SLGFD also worked with DST IT to migrate

financial data from the legacy system to the new environment to maintain historical fiscal records for

ongoing trend analysis. In 2013, DST IT constructed a secured environment at the offices of the SLGFD to

house a virtual server to host the audit management system. As part of this design, the data is replicated to

the DST IT data center for nightly backup. Users have seen improved system performance while also

leveraging the benefits of data replication and backup for system recovery. The audit management system is

now fully operational and DST IT and SLGFD coordinate activities for regular software upgrades and system

testing in response to IT environment changes.

New Fees for Borrowers to Enhance IT Operations In FY 2011‐2012, the SLGFD modified the fee structure for services rendered to local units involving debt

issuance. The following year, the funds accumulated through the collected fees were appropriated by the

General Assembly for IT enhancements for the division, including the funding of an IT position dedicated to

the needs of the SLGFD. In March of 2013, this position was filled and the additional funds and personnel have

been instrumental in the completion of the audit management system implementation and the

enhancements to AFIR collection and presentation. These funds will also be used to address an aging debt

management system. A steady revenue stream and dedicated personnel will ensure that SLGFD remains able

to leverage information technology to meet their mission and serve local governmental units effectively.



55


Enhance Accountability of Department Services – Improve Administrative Management Communication with local governmental units is core to the mission of the SLGFD. Whether providing

guidance at a local unit’s request, or alerting local units to potential issues, the staff of the SLGFD spends a

great deal of time engaged with the staff and elected officials of local governmental units. The division

requires a centralized repository for the maintenance of contact information for chief elected officials,

mayors, city and town managers, finance officers, and other key governmental employees or officials. SLGFD

also needs to improve upon the tools used in the management of the audit review process. The division needs

to maintain records of audit contracts issued by local units to Certified Public Accountants (CPAs), invoicing

payment for audits between local units and contracted CPAs, and key CPA contact information. This

information is currently tracked in disparate Excel spreadsheets and data integrity and consistency is a

challenge.

Enhance Accountability of Department Services – Improve Communication with Constituents In addition to improving direct, individual interaction between SLGFD staff and local units, the agency seeks

to improve their overall communication with key constituencies. There is an abundance of information on the

NCTreasurer.com website; however, SLGFD often receives feedback that the information is difficult to find.

The agency maintains a very active ListServ group for government financial officers; however, SLGFD also

needs to consider other approaches to remain engaged with finance officers, auditors, and other individuals

that consistently interact with the agency. Making all accepted annual audits available on the section’s

website has been a long‐term goal of the division. Until recently, there were alternative locations that certain

users could access for electronic copies of some units’ reports. Because those alternative locations are being

eliminated, SLGFD believes that making the approved copies of all annual audits submitted, starting with the

2014 fiscal year, should be a priority.

Innovate and Modernize Operations – Aging Debt Management Platform Since 1998, SLGFD has used a combination of Microsoft Excel spreadsheets and an Oracle database to track

the debt instruments issued by local units. While this system has worked relatively well, there are limitations

to this debt tracking method for reporting and analysis, and at the same time, the entire debt approval and

issuance process remains largely manual and paper‐based. SLGFD maintains a large volume of physical

documentation related to debt issuance, often times for decades due to the life of a bond. SLGFD is seeking a

solution to modernize the debt approval and issuance process, from intake to final sale, as well as provide

more robust data management for analysis and reporting.



56

Current System Portfolio and Operational Activities The Application Portfolio of the SLGFD supports the business operations of the division. The following

systems are essential components of normal business operations. A mapping of business processes to

systems is provided in Figure 10 ‐ SLGFD ‐ System to Business Process Mapping. The 2014‐2018 Application

Roadmap for the division is provided in Figure 11 ‐ SLGFD ‐ System Roadmap.

Audit Management – CCH Workpaper Manager CCH Workpaper Manager, a commercial software package from WolterKluwer, is used by the Fiscal

Management Section of the division to manage information collected on the thousands of annual audit

reports received each year from counties, municipalities, school boards, public hospitals, and other local

governments and public authorities. A document management component of the software stores audit

reports, contracts, invoices, and any resulting communication, while the trial balance functionality of the

software is used to store and report the financial data elements presented in the annual audited financial

statement. This software also is used by the Unclaimed Property and Escheats Division for the management

of audit activity conducted by that division.

Document Transfer – LeapFile LeapFile is a subscription‐based, Software‐as‐a‐Service (SaaS) file exchange portal. It is utilized by the Fiscal

Management Section to allow local government units or their auditors to file their annual reports and related

documents in PDF form, which are often too large to be transmitted via e‐mail. The submitted electronic

documents are uploaded from LeapFile to CCH Workpaper Manager for permanent storage.

Debt Management – SQL Server Database with Excel Spreadsheets Information on bonds issued by the State of North Carolina and local governmental units is stored in a SQL

Server database and updated and accessed through Excel spreadsheets customized using Visual Basic for

Applications (“VBA”). This system is slated for replacement in 2015.

AFIR Reporting – Department of State Treasurer Website AFIR information is collected via a US Census Bureau website and the information is loaded into a SQL Server

database through an automated transfer and upload process. The data is reported to the public on the

Department of State Treasurer website through an ASP.Net website with reports designed in SQL Server

Reporting Services.

County and Municipal Financial Condition Dashboard The County and Municipal Financial Condition Dashboard is a reporting tool accessible through the

Department of State Treasurer’s website, although it is hosted on a separate web application server and

database. Developed and released in 2010 in conjunction with the UNC School of Government, the Financial

Condition Dashboard distills complex financial data into a set of 6‐8 key indicators that reveal the financial

condition of a county or municipality. The tool also permits the benchmarking of financial condition data

against as many as five similar units. The tool utilizes SQL Server Reporting Services, an ASP.NET Web Forms

interface, and a SQL Server 2010 database.

Bond Sales – Parity Municipal and state bonds are sold through an auction‐like mechanism. Parity by iPreo is a hosted service

that provides a virtual marketplace for the electronic sale of bonds.



57

Municipal Bond Manager – Muni‐Ease Bond Manager Muni‐ease is a municipal bond management application developed and supported by Prescient Software.

Muni‐ease is used by the division to validate bond sale bid calculations received through Parity.

Time‐Value Calculations ‐ T‐Value T‐Value from TimeValue Software is a purchased application that performs amortization calculations on debt

instruments.



58


STATE & LOCAL GOVERNMENT FINANCE DIVISION

MUNI-EASE BOND MANAGER

(Purchased)

CCH WorkPaper Manager

(Purchased)

Audit Report Review

EXCEL SPREADSHEETS

WITH SQL SVR DB(In-house

Developed)

Audit Contract Review/Approval

203 Cash and Investments

Review

NCTreasurer.com(In-house

Developed)

Publish Bond Ledger

Publish AFIR information

“White Letter” generation for

corrections to audit

AFIR Collection and Processing

Statistical Report Generation

Unit Letter Generation for

warning regarding fiscal condition

Debt Applications

Debt Schedule Tracking/Bond

Ledger

Publish Statistical Reports

Tracking of Authorized Debt

Generate Annual Debt Service Requirements

Report

Generate Monthly Debt Notices

Arbitrage Compliance Monitoring

Verify Bond Sale Bid Calculations

TVALUE(Purchased)

Perform Time/Value Calculations

on Debt

PARITY(Hosted by Ipreo)

Manage Bids for Bond Sale


Financial Dashboard(In-House

Developed)

Public Access to County and

Municipal Fiscal Condition Ratios

LeapFile(Hosted)

Secure File Transfer for Large Audit Files

and Data

Figure 10 ‐ SLGFD ‐ System to Business Process Mapping



59


2014 2015 2016 2017 2018State and Local Government Finance Division

CCH WorkPaper Manager - Audit Management Maintain Maintain Maintain Maintain Maintain Bond System Maintain Replace Financial Condition Reporting Dashboard Maintain Maintain Maintain Maintain Maintain AFIR - Annual Financial Information Reports Maintain Maintain Maintain Maintain Maintain LeapFile Maintain Maintain Maintain Maintain Maintain Parity Maintain Maintain Maintain Maintain Maintain Mun-Ease Bond Manager Maintain Maintain Maintain Maintain Maintain Tvalue Maintain Maintain Maintain Maintain Maintain

Figure 11 ‐ SLGFD ‐ System Roadmap



60


Debt Management System Replacement DST IT has been working with SLGFD to capture the necessary requirements for a new Debt Management

system. A survey of the product market has also been conducted and appropriate commercial products that

meet many of the division’s needs have been identified. Throughout the duration of 2014, an RFP will be

prepared and released to solicit proposals for a commercial system. While the primary requirements of a new

system are focused on replacing the data tracking functions of the current system, this implementation

represents an opportunity to improve and enhance several other business processes surrounding debt

approval, issuance, and monitoring. Many commercial systems contain functionality for electronic document

management and storage. This functionality would be a significant improvement over current paper‐based

processes. Integration with other data providers, such as Pinnacle and Sterling, to allow for monitoring of

arbitrage compliance is also being sought in a new system. Selection of a new system is expected to occur in

1Q 2015, with implementation to be completed by the end of that year.

Administrative Management System An electronic contact and administrative management system will provide centralized management of key

information, permitting a team‐based approach to communication with local units and management of the

audit review process. Improved tracking of the audit review process will also provide management insight

into operational efficiency. SLGFD is currently conducting research into potential solutions; however, similar

needs for centralized contact management exist in several other divisions. In 2Q 2015, DST IT will begin

working with SLGFD and other divisions to determine the appropriate strategy for contact management. This

strategy must weigh the benefits of segmented implementations of division‐specific contact management

systems against efficiency and cost benefits of standardization. DST IT and SLGFD will seek to begin

procurement of a solution in 3Q 2015, with implementation before the end of the 2Q 2016.

Website Redesign and Other Communications Initiatives SLGFD has identified a need to enhance communication with constituent agencies and individuals. The

division will be working with the Communications Section of the Office of State Treasurer to redevelop the

presentation of information on the Department’s public website, NCTreasurer.com. The aim of this initiative

is to make information easier to find through website navigation, promote the most relevant information on

the website for quick access, and cull superfluous information from the site. Most importantly, SLFGD seeks

to create on NCTreasurer.com, an online central repository of electronic copies of accepted audit reports

received for the 2014 Fiscal Year. Following the website redesign effort and parallel with efforts to implement

an electronic contact management system, SLGFD will be reviewing other communication and outreach

efforts and may call upon DST IT resources for assistance. This work is expected to begin in 2Q 2015 and

continue for about one year.



61

State and Local Government Finance Division – 2015‐2017 Strategic Information Technology Initiatives

Website Enhance

ments and

Other Com

munication

Initiative

s

Debt Management

System

Contact M

anag

ement System

Jan 2016‐Dec 2016Jun 2014‐ Dec 2014 Jan 2015‐Jun 2015 Jul 2015‐ Dec 2015

Develop RFP for Debt Management

System

Begin System Implementation

Release RFP and Solicit Proposals

Evaluate Proposal and Select Vendor

Perform Historical Data Migration

Complete System Implementation

Develop Requirements for

Contact Management

Conduct Market Survey of CRM

Products

Evaluate all DST CRM Needs

Develop RFP for Contact

Management System




Review Website Content with

Communications Section

Purge Extraneous Website Content

Restructure the Presentation of Key

InformationOther

Communication Initiatives as

Defined

Figure 12 ‐ SLGFD ‐ 2015‐2017 Strategic IT Initiatives


62

Unclaimed Property and Escheats Division



63

Overview

The Department of State Treasurer oversees and

maintains the State’s unclaimed property. By law,

unclaimed property is escheated, or turned over,

to the Department for safekeeping.

The Unclaimed Property and Escheats Division is

responsible for recovering and returning such

property to all rightful owners.

The funds in this program were previously held by

financial institutions, insurance companies,

government agencies and other businesses in the

form of wages, utility deposits, insurance policy

proceeds and other sources of funds. Property is

considered unclaimed when the apparent owner

fails to communicate interest in it for a period of

time called the dormancy period. Once the

property has met its dormancy limit and the

holder has made a good faith effort to locate an

apparent owner, any funds they are holding are

escheated to the State Treasurer’s Office. Upon

receipt of this information, the Unclaimed

Property and Escheats Division works to locate the

owners by various means, including listing names

on the website, earning media coverage through

television and newspapers, and sending lists for

Clerks of Court.

The interest earned on these funds is sent to the

State Education Assistance Authority (“SEAA”) for

student loans and grants. At the end of the 2013

fiscal year, ending June 30, a total amount of $2.4

million from interest earned and $ 27.5 million

from the principal was sent to SEAA to be used for

needy and worthy students. A total of 90,836

students were assisted through SEAA with

scholarships from the Escheats Fund during the

2012‐2013 academic year.

The General Assembly has mandated that

additional funds from the principal be sent to the

Department of Veterans Scholarship Fund in the

amount of $6.5 million and the Community

College Program in the amount of nearly $16.3

million.

Currently the unclaimed property fund is valued at

approximately $383 million. This is a combination

of unclaimed property collected from businesses

and interest earnings from the investment of the

fund. The total number of reports received from

businesses for year ending June 30, 2013, was

11,023, totaling $162.5 million.

Additionally, Division staff attends outreach

events such as the North Carolina State Fair,

Mountain State Fair, various civic organizations’

events and many others throughout the State to

promote public awareness about the program.

The total number of claims paid for year ending

June 30, 2013, was 38,100, totaling $50.7 million.

History The concept of escheat originated in England

during the Middle Ages. The basic premise was

that property which remained without an owner,

or to which the owner’s heirs failed to make a

claim, reverted to the Sovereign, from whom all

property rights were derived. This concept was

brought to the American colonies by the English

settlers.

Upon the conclusion of the Revolutionary War, the

State of North Carolina inherited the rights

previously held by the Crown, including the right

of escheat. The North Carolina Legislature

adopted the University Act of 1789, which gave

the newly formed University of North Carolina “all

the property that has heretofore or shall hereafter

escheat to the state.”

Throughout the early decades of the University,

the escheat collections, though often minimal,

provided a vital source of funds for the institution.

The Treasurer of the University was responsible



64

for the collection of escheat property under the

law. For the period through June 30, 1971, the

University of North Carolina had collected and was

maintaining a fund of nearly $5 million.

Effective July 1, 1971, the State Treasurer was

designated the Escheat Officer for the State of

North Carolina, with the responsibility for

collection, management and investment of

moneys in the Escheat Fund.



65


Custom Workflow Management System with Virtualization Beginning in 2007, UPD utilized EMC WorkflowXtender for the management of business processes – the

routing of claims for review and approval, the routing of audits for assignment, review, and approval, and the

routing of holder reports for processing and balancing. Integrated with ApplicationXtender, the division’s

electronic document management solution, WorkflowXtender was an important part of the division’s IT

systems portfolio.

EMC dropped support for WorkflowXtender 6.0 in April of 2012, and completely redesigned their business

process automation software offering. No direct upgrade path was provided, so implementation of the new

release would have involved re‐engineering the entire business process automation solution. DST IT instead

developed a custom workflow system utilizing Microsoft .NET technologies such as ASP.NET MVC 3 and

Windows Workflow Foundation to meet the work routing and monitoring needs of the division.

This system was deployed in 3Q 2012 and was in full production use by the end of the year. The custom

system allows for greater flexibility to address changing requirements and has produced over $40,000/year in

cost savings on licenses for the EMC product.

Following the deployment of the new workflow solution, remaining components of the division’s document

imaging and management system were migrated from aging hardware into a virtualized environment. Server

applications were consolidated and setup to run the DST IT VMWare environment. This has reduced

operational expenses and improved reliability and recoverability of the imaging, document management, and

workflow systems. Database components were moved into a consolidated environment, also producing

savings in licensing costs and operational management efficiencies.

NCSU Analytics Study of Claim Activity In 2012‐2013, UPD and DST IT partnered with the North Carolina State University Institute for Advanced

Analytics to conduct a quantitative inquiry into the North Carolina Escheat Fund. A team of graduate

students in the Master of Science in Analytics program worked with UPD staff to explore claim activity, the

impact of principal withdrawals on fund balances, and the demographics of claimants. The study provided

some valuable insights into public policy around the fund, as well as informed the division on operational

strategies for citizen outreach.

Claims Fast‐Tracking Initiative Currently, individuals may search for unclaimed property using NCCash.com, the State’s unclaimed property

search portal; however, all claims must be printed, signed, notarized, and mailed to the division for

processing. This is a very labor intensive process, both for the claimant and the processors at UPD. In order to

facilitate full online claim initiation and automated processing, UPD has partnered with Xerox to develop a

new web portal for property claims.

This portal will permit individuals to search for escheated properties, initiate claims without a physical claim

form, and in some cases, automatically approve the claim for payment. Utilizing LexisNexus InstantID, the

same technology used by credit reporting agencies, individuals will be asked a series of detailed questions to

positively identify themselves. Drawing on the same repository of personally identifying information, the



66

portal will also be able to positively associate an individual with a property being claimed. Once these

conditions are met, the claim will be sent to UPD for immediate payment, saving both UPD and the claimant

time and effort from the traditional claims process.

This portal will be integrated with MissingMoney.com, a national repository of unclaimed property,

expanding the outreach of UPD to more potential claimants. Work of this initiative is underway.



67


Enhance Accountability of Department Services – Claim Processing Metrics The workload of the UPD is continually increasing. Improved outreach efforts and impending data matching

programs have driven increases in claims and claim payments. Integration with the national

MissingMoney.com portal is also expected to trigger a dramatic increase in the number of property claims. In

order to meet statutory requirements regarding the time allowed for claim processing and return of

escheated properties, UPD employs a variety of methods for claim processes: manual in‐house processing,

contracted outsourced processing, and soon, automated claim and identity validation.

Capturing and analyzing metrics on claim processing are critical for UPD. Understanding the utilization and

throughput of different methods of claim processing can inform spending on external or automated services.

Understanding the impact of outreach and marketing events on claim volume can improve the quality of

outreach and focus efforts for maximum citizen impact. Monitoring the performance of internal processes

can drive process improvement efforts, training, and personnel coaching.

UPD will need to work with DST IT on capturing data regarding claim processing across various systems and

aggregating the data for analysis. UPD will also seek to improve their analytics capabilities, to interpret the

data collected and take meaningful action stemming from data‐driven decision making.

Innovate and Modernize Operations – Business Process Alignment When fully implemented in late 2012, the business process automation system closely approximated the

business processes in place at UPD. Since that time, UPD has modified claim processing but DST IT was

unable to respond to these changes due to a prolonged number of vacant staff positions. As the Systems

Development group of DST IT approaches full staff, they are now in a position to work with UPD to address

these gaps. At the same time, with a number of new methods in place for claim initiation and processing, as

well as an increased focus on metrics, an assessment of existing processes and new needs for the workflow

system should be conducted.



68

Current System Portfolio and Operational Activities The Application Portfolio of the Unclaimed Property and Escheats Division supports the business operations

of the division. The following systems are essential components of normal business operations. A mapping of

business processes to systems is provided in Figure 13 ‐ UPD ‐ System to Business Process Mapping. The 2014‐

2018 Application Roadmap for the division is provided in Figure 14 ‐ UPD ‐ System Roadmap.

UPS2000 – Unclaimed Property Management System The Unclaimed Property Management System is the principal business application of the division. It is the

system of record for all property under the management of the Escheat Fund. It also processes all claims

against escheated property and produces a “settlement” file, transmitted to the Office of the State Controller

for the generation of warrants payable to claimants. The current UPMS is UPS2000, a client/server

application supported and maintained by ACS, a division of Xerox. The division has used UPS2000 since 2003.

NCCash.com – Unclaimed Property Search NCCash.com is a web application developed by DST IT. It is made available to the public to search property

escheated to the State of North Carolina in the last 15 years in excess of $50 in value. It provides a facility for

the generation of claim forms; however, it does not validate identity, accept electronic claims or evidence, or

report claim processing status. It will be replaced by the end of 2014.

UPP‐IDMS – Unclaimed Property Program – Integrated Document Management System UPP‐IDMS is an electronic document management and business process automation system implemented in

2007 for the management of claim forms, evidence, holder reports, correspondence, audit reports, and other

electronic artifacts of operational activities. The system consists of EMC ApplicationXtender 6.5, an electronic

document management system, Oracle Web Capture, a web‐based document scanning and indexing

solution, and a business process automation toolkit for the routing and monitoring of work activities

developed by DST IT in .NET.

Unclaimed Property Audit ‐CCH Workpaper Manager CCH Workpaper Manager, a product from WolterKluwer, is used for the management of audit activities

performed by the division. CCH Workpaper Manager was implemented in early 2012 and allows for the

construction of audit programs, the management of audit artifacts, the management of trial balances, and

routing and approval of audits.

Call Center – Symposium The Call Center of the Unclaimed Property and Escheats Division uses Nortel hardware and software hosted

by ITS Telecommunications. Symposium is used to monitor and report on call center activities.

Address Verification – MelissaData All outbound mail is validated for address accuracy and matched against the National Change of Address

(“NCOA”) database. This is necessary to receive bulk‐mailing discount rates from the US Postal Service. DST

IT has contracted with MelissaData, a USPS‐recognized service, to perform address verification services.

MelissaData provides a web‐service interface to their hosted database of valid addresses and the NCOA

database. This service is used by the Unclaimed Property and Escheats Division, as well as the Retirement

Systems Division (“RSD”).



69



UPS2000(Purchased)

SYMPOSIUM(Hosted by ITS)

Claim Initiation and Claimant Property

Research

DOCUMENT MANAGEMENT

(Purchased)

ONLINE PROPERTY

SEARCH(Developed In-

House)

CCH WORKPAPER MANAGER(Purchased)

Claim Processing

NCAS(Hosted by NCOSC)

Holder Reporting and Receipt of

Funds

Claim Payment

Audit and Compliance

Tracking

Claim Processing


Funds


Tracking


Research


ResearchAuditingClaim Payment


WORKFLOW(Developed In-

House)

Claim Processing


Funds


Tracking

Management of Escheats Securities

Figure 13 ‐ UPD ‐ System to Business Process Mapping



70


2014 2015 2016 2017 2018Unclaimed Property Division

UPS 2000 - Unclaimed Property Management System Maintain Maintain Replace NCCash.com - Unclaimed Property Search Replace Xerox Fast-Track Claim Processing Maintain Maintain Maintain MaintainUPP-IDMS - Unclaimed Property Integrated Document Management System Maintain Enhance Maintain Maintain Maintain

CCH Workpaper Manager - Unclaimed Property Audit Maintain Maintain Maintain Maintain MaintainSymposium - Call Center Maintain Replace MelissaData Smart Mover Maintain Maintain Maintain Maintain Maintain

Figure 14 ‐ UPD ‐ System Roadmap



71


Complete Implementation of Claims Fast‐Tracking Initiative The first phase of the Claims Fast‐Tracking Initiative will be completed before the end of 2014. At that time,

NCCash.com will be retired and UPD will be leveraging the Xerox portal for claim initiation and approval.

Data will also be provided to Xerox for publication on MissingMoney.com. During the initial phase of

implementation, automated approval of claims will only be available for claims of less than $500, and

enhanced authentication using InstantID will not be activated. UPD will be monitoring performance of the

Fast‐Tracking portal and may adjust claim value thresholds and activate enhanced authentication for

automation of claim processing.

Continue Data Matching Efforts Session Law 2011‐230 requires that the Department of Motor Vehicles, the Employment Security

Commission, and the Department of Revenue must share information with the Department of State

Treasurer that can be used to identify potential claimants of escheated or abandoned property. These

agencies have up‐to‐date address information on NC residents acquired through driver licensing,

unemployment claims, and personal tax returns. This address information can be matched against property

records to identify the current location of potential claimants. Claim forms and other informational materials

can be mailed or electronically‐mailed to potential claimants identified through the data matching process.

UPD, with the assistance of DST IT, is currently working on conducting data matching efforts with these

agencies. Work in this area will continue; improving the accuracy of matches, as well as broadening the

sources of information, will lead to more successful identification of property owners.

Since the North Carolina Retirement Systems are also under the management of the Department of State

Treasurer, information from these systems provides another opportunity for the Unclaimed Property and

Escheats Division to match against approximately 660,000 records to identify the current location of

potential owners of unclaimed property.

Efforts underway in the Government Data Analytics Center (GDAC) to aggregate data held by various State

agencies may also be beneficial to this program. By leveraging the GDAC, UPD and DST IT can conduct data

matching against one aggregated repository of information. The technical resources of the GDAC and SAS

can assist with improving matching accuracy and potentially utilize fuzzy matching or other data mining

techniques to identify non‐obvious property and owner matches.

Business Process Automation Modifications As stated earlier, gaps between UPD business processes and their automation systems are inhibiting efficient

divisional operations. At the same time, the current system may not be adequate for the collection of claim

processing metrics necessary for management oversight and business decision making. At the conclusion of

the Fast‐Track implementation, DST IT will work with UPD to address deficiencies in the current workflow

design. This work is expected to begin in 1Q 2015 and conclude by 3Q 2015.

Evaluate Unclaimed Property Management Systems For many years, the UPS2000 system used by the UPD for the management of escheated properties and

claims was the only viable commercial product available for this purpose. At one time, this system was used



72

by 38 states for the management of unclaimed property. Utilizing this system avoided costly custom

application development and maintenance efforts and ensured a robust and reliable tool for operational

management. The UPS2000 is aging technology; written in Delphi and making use of a client/server

architecture, it can be burdensome to maintain.

There are new entrants into the marketspace, notably, a solution recently implemented in the State of

Delaware. UPD and DST IT will continue to watch the marketspace for new or enhanced products and seeks

to seriously evaluate alternatives in the coming years. If a decision is made to change platforms, it is

anticipated that a procurement for a new system would be initiated in late 2015.



73

Unclaimed Property and Escheats Division – 2015‐2017 Strategic Information Technology InitiativesBusines

s Proce

ss

Automation

Enhan

cements

Claim Fast Track

Implementation

Data M

atching

Eva

luation of New

Unclaimed Property

Managem

ent System

Claim

Processing

Ana

lytics


Develop and Test New Fast‐Track

Portal

Activate Portal and Missing Money Data

Exchange

Evaluate Fast‐Track Volume and Performance

Modify Portal; Activate InstantID

Validation

Interview other states about

alternative systems

Conduct Procurement Activities

Evaluate GDAC for Data Matching Capabilties

Perform Annual Data Matching

Address “Quick Hit” Deficiencies

Review Processes for gaps and

measurement needs

Comprehensive Redevelopment

Effort (if necessary)

Evaluate Measurement

Needs

Source Performance Data

Develop Reports, KPI, Dashboards,

etc..

Demonstrations of systems in the marketspace

Draft Requirements and Specifications for a Replacement

System

Figure 15 ‐ UPD ‐ 2015‐2017 Strategic IT Initiatives


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Retirement Systems Division



75

Overview

The Retirement Systems Division (“RSD”) of the

Department of State Treasurer administers the

retirement and benefit plans that cover the vast

majority of public employees in the state. The

Division administers both the public pension plans

and the NC Supplemental Retirement Plans

(voluntary defined contribution plans).

The North Carolina public pension plans provide

benefits for more than 900,000 members,

including:

• Teachers

• State employees

• Firefighters

• Police officers

• Other public workers

The North Carolina Retirement Systems

(“Systems”) is the 31st largest pension fund in the

world and the 9th largest public pension fund in

the United States. RSD administers the retirement

and fringe benefit plans created under state law

for active and retired public employees who are

members of the Systems. Staff continuously

reviews features and options within the defined

benefit programs to ensure that plans and benefits

are sustainable over time and are an efficient use

of employees’ and taxpayers’ contributions.

RSD also administers additional benefit plans,

including the NC 401(k), Deferred Compensation

(NC 457) Plans, NC 403(b) Program, Disability,

Death and certain benefits unique to law

enforcement officers. As of July 2014, over

266,000 North Carolina public servants have

invested over $8.67 billion in combined assets.

A key purpose of the retirement systems and

benefit plans is to assist the public employers in

the state in recruiting and retaining skilled

employees for careers in public service by

providing valuable post‐employment benefits,

including replacement income at retirement, as

well as disability or survivor benefits.

The Systems’ assets, referred to as the North

Carolina pension fund, were valued at $80 billion

as of June 30, 2013.

History The North Carolina Retirement Systems Division

was established in 1941. Prior to establishing RSD,

the only pension system that was established in

the state was for Confederate soldiers.

The first pension law went into effect in 1885 and

granted a pension of $30 annually to Confederate

veterans who were unable to work due to the loss

of an eye, leg or arm. These benefits were also

available to soldiers’ widows as long as they did

not remarry. The system expanded later in 1885 to

include widows of soldiers who died of disease

while in active service.

By 1901, the pension became available to all

widows, soldiers and sailors who were unable to

perform manual labor due to injuries sustained

while serving on behalf of the State of North

Carolina or the Confederate States of America.

Pension benefits to members of the Confederate

military were:

First class: totally disabled ‐ $72 annually

Second class: loss of leg or arm ‐ $60

annually

Third class: loss of hand or foot ‐ $48

annually

Fourth class: widows, those who lost an

eye, and those who were disabled due to

other wounds not classified in the prior

categories ‐ $30 annually

In 1927, pensioners were reclassified to include

slaves who had been servants to soldiers or who

had served in a role for soldier support.



76

Today, public pensions have expanded to include

many more North Carolinians under the

management of the Department of State

Treasurer. More currently:

In 1939, the Local Governmental

Employees’ Retirement System (“LGERS”)

was established. The System framework

was in place; however, the System did not

begin acquiring members until 1945.

In 1941, the Teachers’ and State

Employees’ Retirement System (“TSERS”)

was established. Parts of the Division were

under the State Auditor and parts were

under the State Treasurer.

In the 1970s, the General Assembly

created the Disability Salary Continuation

Program for members of TSERS. The

program, designed as a temporary

disability program, was discontinued and

reestablished in 1988 as the Disability

Income Plan of North Carolina (“DIPNC”)

for TSERS members.

Today, the Retirement Systems also processes

death benefits and return of contributions to its

members, far beyond the services provided in the

late 1800’s.

Division Structure

Staff efforts are devoted to accurate and timely

benefit distribution in the most efficient and cost‐

effective manner possible. In order to optimize its

administration efforts, the Retirement Systems

Division is divided into six working groups:

The Director’s Office

The Payroll Services Section

The Benefits Processing Section

The Member Services Section

The Retirement Processing Section

The Supplemental Retirement Plans

Director’s Office

The Director’s staff is responsible for the overall

operation of the Division and carrying out the

policies and directives of the State Treasurer and

the governing boards. They provide assistance to

legislators and committees of the General

Assembly, including:

Drafting proposed legislation and

acquiring actuarial notes for introduced

bills

Managing action and administrative

appeals by individual members of the

Retirement Systems

Maintaining a working relationship with

associations and organizations of

employees and employers

Providing information to state agencies,

institutions and local governments

Division operations include processing

applications for retirement; processing

applications to receive benefits such as

contribution refunds, disability or death benefits;

maintaining retirement accounts and data; and

providing customer service to all active and retired

employees.

Payroll Services Section

The main function of the Retirement Accounting

Section is to provide timely benefit payment

services to qualified payees of the Systems in a

customer‐service driven environment. In addition,

the section is responsible for maintaining accurate

financial records for all payees, tracking records

and balancing payroll contribution reports from

more than 1,200 participating public sector

employers.

During the 2012‐13 fiscal year, the Payroll Services

Section:

Processed and balanced contribution

information from employers’ payroll



77

reports submitted each month to

individual accounts in ORBIT (Online

Retirement Benefits through Integrated

Technology). The employer payroll

information identifies the percentage each

employee contributes to his or her

retirement every pay period. By the end of

the fiscal year, 489,336 members’

accounts were posted.

Enrolled 50,334 new members during the

fiscal year

Distributed $ 4.9 billion in benefits for the

fiscal year

Benefits Processing Section

The main function of the Benefits Processing

Section is to ensure prompt delivery of disability

and death benefits for qualified employees,

retirees and their beneficiaries in an effective and

efficient manner.

Staff in this section is also responsible for

calculation and payment of requested refunds of

accumulated employee contributions for qualified

members who terminate employment. Members

who terminate employment with their public

sector employer can apply to have their 6 percent

of contributions made to the Retirement System

refunded no sooner than 60 days after termination

of employment.

This Section also manages the various death

benefit programs related to the systems and the

Separate Insurance Benefits Fund (“SIBF”).

Responsibilities include the calculation and

payment of death benefits, survivors’ alternate

benefits and other lump sum payments.

Additional responsibilities of this Section include

the calculation and payment of monthly disability

benefits, as well as the calculation and payment of

reimbursements for short‐term disability benefits

paid by the various employers under the

provisions of the Disability Income Plan of NC

(DIPNC).

The staff works closely with the Retirement

Systems’ Medical Review Board to:

Determine and administer both disability

retirement benefits under LGERS and

TSERS and disability benefits under the

provisions of the DIPNC for teachers and

state employees

Determine eligibility for disability benefits

from the other retirement system

During the 2012‐2013 fiscal year, the Benefits

Processing Section:

Provided disability reimbursements to

employers totaling $12.8 million

Processed 7,536 death notifications

Refunded 14,190 payments for return of

accumulated contributions

Presented 3,343 new disability

applications to the Medical Board

Reviewed 1,443 re‐examinations for

determination of continued disability

benefits by the Medical Board

Member Services Section

The main function of the Member Services Section

is to provide public service employees and

employers with accurate and timely information

and to provide education about plan provisions,

benefits and available services within the Systems

in a manner intended to advance partnerships and

relationships.

The staff accomplish these functions by replying

to letters and emails of request, responding to

incoming member calls, making onsite visitors

counseling available to all participants in the

Systems, conducting retirement planning

conferences across the state, and secure incoming

mail; additionally, staff are responsible for

scanning, indexing and routing documents; and



78

electronically storing and protecting member

information for the purpose of delivering benefits

in a timely and accurate manner.

The Section:

Responded to 23,453 letters, e‐mails and

faxes

Answered 235,407 telephone calls through

the Call Center

Met with 3,289 members in the Visitors’

Office

Conducted 245 retirement planning

conferences, reaching more than 14,235

members

Provided 23 employer education seminars

that offer an overview of TSERS, LGERS

and DIPNC

Enrolled three employers in LGERS

Processed 74,508 membership support

documents.

Electronically distributed more than

730,000 pages of incoming mail to

operational staff

Created, maintained and stored electronic

files for individuals who are currently, or

have been at one time, members of any of

the state‐administered Retirement

Systems

Maintained more than 20 million

documents in an electronic document

imaging system

Retirement Processing Section

The main function of the Retirement Processing

Section is to calculate retirement estimates for

eligible members and process retirement

applications for continuing benefits in a prompt,

accurate and efficient manner.

The Retirement Processing Section is responsible

for:

Determining eligibility for monthly

retirement allowances

Processing payment of benefits for all

retirement systems governed by the

Boards of Trustees and administered by

the Department

Performing service credit purchase cost

calculations for the various Retirement

Systems

For the 2012‐2013 fiscal year, the Retirement

Processing Section:

Set up 16,260 new retirements for

payment, a 1.6 percent increase from the

previous fiscal year

Conducted more than 160,000 service

purchase estimates through the Service

Purchase Estimator in members’ ORBIT

accounts, a 10.5 percent increase from the

previous fiscal year.

Calculated 5,742 service purchase cost

calculations

Estimated 6,746 retirement benefits

Generated more than 100,000 Transfer

Benefit estimates through the online

Transfer Benefits Estimator in members’

ORBIT accounts, an 11 percent increase

from the previous fiscal year.

Processed 139 applications for a lifetime

monthly benefit (annuity) through the NC

401(k)/NC 457 Transfer Benefit option for

retiring members

Calculated more than 1 million benefit

estimates through the online Benefits

Estimators on the Department of State

Treasurer’s website and in members’

ORBIT accounts, compared to slightly

more than 6,000 requests for manually

calculated estimates

Supplemental Retirement Plans

The main function of the Supplemental

Retirement Plans is to administer the NC 401(k),

NC 457(b) plans and the NC 403(b) program.

Through voluntary participation in one or more of

these plans, public servants are closer to ensuring



79

a secure retirement. The Supplemental

Retirement Board of Trustees, with the State

Treasurer as chairperson, have fiduciary oversight

for the plans. Primary duties include: defining the

strategic direction for the plans, plan design and

investment selection. The record keeper for

NC401(k) and NC457(b) plans is Prudential

Retirement Services. The record keeper for the

NC 403(b) program is TIAA‐CREF. These record

keepers provide retirement communication and

education to nearly 1,000 employers and over

250,000 participants. In addition, the record

keepers are responsible for plan enrollment,

accounting, tax reporting and other services

required by the plans. Retirement Systems

Division staff provide day‐to‐day oversight of all

service providers on the plan. Primary duties

include: adherence to contractual obligations,

legal and compliance oversight, coordination of

plan marketing and communication efforts.



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Modifications to Death Benefits Processing – Phase I In late 2011, a study of the RSD Division’s processing of death and disability benefits was conducted by Buck

Consultants. The study highlighted numerous deficiencies in staff training, operations, procedures, and tools,

notably, problems with the ORBIT system. Buck identified numerous discrepancies between statutory

requirements, business operating procedures, and ORBIT functionality. These discrepancies created the risk

of incorrect payments, exposed the system to potential abuse, and created difficulty for staff working to

meet the needs of retirement system members.

In 2013, RSD, in conjunction with DST IT, rolled out the first set of modifications to ORBIT based upon the

recommendations of the study. This set of modifications was focused on the processing of death benefits for

deceased members and their surviving beneficiaries. The project team conducted a comprehensive analysis

of NC General Statutes, Administrative Code, and department policies and procedures to develop a detailed

requirements definition for modifications to ORBIT. The analysis team involved RSD processing staff, as well

as legal counsel, to ensure modifications to ORBIT would be aligned to applicable legislation.

Based upon these requirements, DST IT redesigned the death benefits modules of ORBIT. Of particular

interest, the team incorporated functionality to identify potential areas of past overpayments to members

and recover outstanding balances prior to the payment of any lump sum benefits. The project team also used

this initiative to introduce ASP MVC architecture into the ORBIT application. Since its original development

almost ten years ago, ORBIT has made use of older, ASP.NET Web Forms technology. The introduction of the

MVC architectural framework aligned ORBIT with more current development practices, as well as enabled the

potential for more automated testing of application code. Interfaces were also redesigned to focus on “single‐

screen” transaction processing, allowing RSD to access all applicable information for a benefit in one place.

This interface redesign has cut down on errors and increased processing efficiency.

Integration with New Vendors for Member Health Benefits In 2013, the Department of State Treasurer selected new vendors to assist in the provisioning and processing

of health care benefits for State workers and retirees. For the first time, DST also provided for two Medicare

Advantage plans among the benefit choices for Medicare‐eligible health plan participants. The selection of

new vendors and the new offerings for Medicare Advantage had a significant impact on RSD. Over 190,000

individuals in receipt of a benefit are eligible for health care coverage, and the options related to Medicare

Advantage were particularly relevant to RSD due to the advanced age of most benefit recipients.

Working in conjunction with SHP, BenefitFocus, and CobraGuard, DST IT and RSD made a series of

modifications to ORBIT to integrate with the new vendors involved in delivering State Health Plan benefits.

DST IT and RSD worked with BenefitFocus on the integration of membership data to allow eligible members

to enroll in healthcare benefits using BenefitFocus’ enrollment portal. DST IT and RSD also coordinated with

CobraGuard for the management of billing for health benefits, including direct bill and payroll deductions for

enrolled members, as well as billing for the State’s share of individual benefits. Open enrollment with the new

vendors occurred in October 2013, and the first deductions were processed in Dec. 2013. Work in this area

continues as DST IT and RSD work to improve the accuracy of eligibility data with a new enrollment vendor

for 2015.



81

Implementation of ORBIT Public Dataset In the summer of 2013, RSD coordinated with internal legal counsel, counsel from the NC Department of

Justice, and various media outlets to develop a comprehensive detailed analysis of all public information held

by RSD in ORBIT, the State’s pension administration database. Beginning in later 2013 and continuing into

mid‐2014, a project team consisting of DST IT and RSD representatives developed seven data extracts based

upon the defined set of public records. Two datasets pertain to individuals in receipt of benefits and include

all current payments, as well as contribution detail records and employment history related to their tenure in

State or Local service. Three datasets detail all information held on individuals actively contributing to a

pension account, or possessing a dormant account from prior employment. One dataset provides information

on beneficiaries in receipt of a benefit, and the final dataset covers members of the Fireman and Rescue

Worker’s Pension Fund. Along with the data extractions, a detailed codebook was prepared describing all the

data in each set, as well as historic information about data collection and limitations of the dataset. The

extraction of the datasets has been automated and DST will no longer need to respond to individual public

record requests for subsets of data from citizens or media outlets. All public data will be made available upon

request, saving considerable time for RSD and DST IT in responding to requests, as well as heightening the

transparency of the agency.



82


Enhance Accountability of Department Services – Firefighters' and Rescue Squad Workers' Pension

Fund Management New legislation, as well as design flaws in the original implementation of ORBIT, have created a situation

where ORBIT requires major modifications to properly manage the Fireman’s and Rescue Workers Pension

Fund. The system relies on an outdated and inaccurate paper‐based process for fire departments to report

membership for service. Contributions to the fund are not directly linked to service, and determinations of

creditable service for the payment of benefits requires a tremendous amount of research and manual

intervention. The self‐service interface for ORBIT is filled with inaccurate information for Fire and Rescue

Workers and needs overhauled. Addressing these deficiencies is one of RSD’s largest challenges in the next

two years.

Enhance Accountability of Department Services – Legal Compliance RSD must make necessary modifications to ORBIT and other systems to maintain compliance with State and

Federal laws governing defined benefit programs. In 2014, DST IT, RSD, and FOD have started work to

address the State’s Qualified Excess Benefits Arrangement (QEBA). This program is designed to provide

payments to individuals whose benefits exceed maximum allowances set by the Federal Government for

defined benefit plans. In mid‐2014, RSD began issuing paychecks for benefits from the QEBA fund and the

infrastructure for fund accounting has been established. Work is continuing for positive pay integration with

the State’s Core Banking system, and since QEBA benefits are defined as payroll, work to produce W‐2

statements for the 2014 tax year must be completed before January of 2015. RSD must also make

arrangements to comply with Federal Required Minimum Distribution rules that mandate the payment of

benefits to individuals at age 70 ½, regardless of employment status. New statutes that have modified the

vesting period for benefits, the payment of interest on the withdrawal of benefits, and the prohibitions on

“pension spiking” compensation adjustments must also be addressed in short order.

Innovate and Modernize Operations – Aging Ancillary Technology Systems RSD has a number of systems that are near their end of usability. In particular, their Interactive Voice

Response (IVR) system and business process automation system are no longer under vendor support. Their

check printing software is antiquated and will lose support soon. The Symposium call center technology used

by RSD was developed by Nortel, a company no longer in existence. RSD must undertake an approach to

replace these systems or modify business practices to phase them out of the organization. Relying on out‐of‐

date and unsupported software and technology introduces risk into ordinary business practices that are

essential to carrying out the mission of RSD.



83

Current System Portfolio and Operational Activities The Application Portfolio of the Retirement Systems Division supports the business operations of the

division. The following systems are essential components of normal business operations. A mapping of

business processes to systems is provided in Figure 16 ‐ RSD ‐ System to Business Process Mapping. The 2014‐

2018 Application Roadmap for the division is provided in Figure 17 ‐ RSD ‐ System Roadmap.

ORBIT (Online Retirement Benefits through Integrated Technology) ORBIT comprises three distinct systems utilizing the same core common codebase and data repository,

ORBIT Line of Business, ORBIT Member Self‐Service, and ORBIT Employer Self‐Service

The ORBIT Line of Business System is the principal business application of the division. It is the system of

record for all pension systems under the administration of RSD and maintains all records of service,

contributions, refunds, service purchases, and named beneficiaries. It is used by RSD personnel to process all

system activities, such as system enrollment, retirement, disability applications, refunds, service purchases,

and payment of death benefits. ORBIT is also used to process the monthly payroll for all benefit recipients –

over 270,000 people each month.

ORBIT Member Self‐Service is a publicly accessible web application that allows members of the retirement

system to manage elements of their benefits through an online interface. Members can request benefit

estimates, obtain their current balance, and change tax withholding, electronic fund transfer, and address

information through the Member Self‐Service application. ORBIT Employer Self‐Service provides tools for

participating employers to submit information regarding employees to RSD. Each month, via FTP or through

the Employer Self‐Service interface, each employer participating in a pension system submits information on

service, salary, and pension contributions for all active employees.

The ORBIT system was first placed in service on Dec. 31, 2005 for the processing of retirement payroll. In

October 2007, all remaining processes were implemented. The ORBIT system was constructed by

BearingPoint (now Deloitte) personnel, working alongside DST IT and RSD resources. It is a Microsoft .NET

application, utilizing a mixture of ASP.net Web Forms and ASP MVC4 and other .NET technologies such as

Windows Communication Foundation (“WCF”) and LINQ. It interfaces with a Microsoft SQL Server RDBMS.

Along with the Microsoft .NET application, the ORBIT system makes use of the following technologies.

Microsoft Biztalk

Microsoft BizTalk Server is a system integration and process orchestration tool used extensively by

the ORBIT system. Employer Reporting, the process by which employers participating in an RSD‐

managed retirement system report information on active employees for service and contribution

records, is managed by Microsoft BizTalk. The ORBIT system receives monthly feeds of personnel

records from over 1,000 employers participating in TSERS and LGERS each month. The BizTalk

Server also manages integration between Microsoft Dynamic GP, the accounting system used by

RSD, and ORBIT, passing accounting transactions between systems.

Adobe Forms

Adobe Forms is used in ORBIT to produce pre‐populated PDF forms for printing or online

presentation. These forms are used by members to initiate RSD processes, just as refunds of

contributions, or election of retirement options.



84

SQL Server Reporting Services

SQL Server Reporting Services is part of the Microsoft Business Intelligence Suite of SQL Server

products. It is used as the reporting toolkit attached to ORBIT.

MappingSuite

MappingSuite is a software package from the Mapping Group used for the production of checks. Each

month, RSD still produces hundreds of physical checks – each member’s first monthly retirement

benefit check is printed, as are monthly payroll checks for individuals not opting to participate in EFT

and grandfathered into the physical payment system.

SilentPrint

SilentPrint from Funasset Software is a batch print management package. This tool is used to

produce all outbound physical mail for RSD, printed nightly.

RSD‐IDMS – Retirement Systems Division – Integrated Document Management System RSD‐IDMS is an electronic document management and business process automation system implemented in

2002 for the management of documents related to enrollment, eligibility and processing of pension benefits

along with any other electronic artifacts of operational activities. The system consists of EMC

ApplicationXtender 6.0, an electronic document management system, Oracle Web Capture, a web‐based

document scanning and indexing solution, and EMC WorkflowXtender 6.0, a business process automation

toolkit for the routing and monitoring of work activities. WorkflowXtender will be upgraded in 2015.

RSD Data Warehouse The RSD Data Warehouse is a reporting and analysis data repository used by the RSD for operational

performance monitoring, as well as demographic and financial analysis of the various retirement systems.

The Data Warehouse aggregates data from ORBIT and the RSD‐IDMS and leverages the SQL Server Business

Intelligence Toolkit to provide analysis cubes, reports, report builder functionality, and data mining functions.

Address Verification – MelissaData All outbound mail is validated for address accuracy and matched against the National Change of Address

(“NCOA”) database. This is necessary to receive bulk‐mailing discount rates from the US Postal Service. DST

IT has contracted with MelissaData, a USPS‐recognized provider of address validation services, to perform

address verification services. MelissaData provides a web‐service interface to their hosted database of valid

addresses and the NCOA database. This service is used by RSD, as well as the Unclaimed Property and

Escheats Division.

Call Center – Symposium RSD’s Call Center uses Nortel hardware and software hosted by ITS Telecommunications. Symposium is used

to monitor and report on call center activities. An Integrative Voice Response (“IVR”) system from Octel is

also integrated into call center operations.



85



ORBIT(Purchased)

Custom application

DOCUMENT MANAGEMENT

(Purchased)

Imaging – all incoming correspondence items

get saved to each member’s account as

images

Workflow – Imaged documents generate workflows that route those documents to

the various processes to be worked.

MAPPING SUITE

(Purchased)

SILENT PRINT(Purchased)

SMART MOVER /MELISSA DATA

(Purchased)

Print checks, EFT stubs, letters and correspondence

Validate mailing addresses in ORBIT

Generate PDF forms developed with

Adobe Designer.

Adobe Forms (Purchased)

Microsoft BizTalk(Purchased)

Orchestrate interface files to and from external entities

including employer reporting monthly

contribution files from the 1200+ employers

ORBIT SELF SERVICE

(Purchased)Custom application

Accounting – Maintain EFT bank account, tax

withholding overpayment collection, integration into

Dynamics, etc.

Member Profile – all major information about a member presented on one screen plus create request and journal

updates to document interactions with

members

Correspondence – All Letters, Adobe PDF

application forms, cover sheets, etc. produced daily

via batch process.

Employer Reporting – collect monthly member contributions from 1200+

employer entities

Payroll – monthly for retirees / benefit recipients and

supplemental payrolls for refunds /rollovers /

DIP ER Reimbursements, etc.

Reports – Any and all reports used throughout the

system (metric reports, work queues, status

reports, processing results)

COLA / Post Interest /Annual Statements / 1099/W-2 – major annual batch

processes

Refunds - refund contributions and any

accrued interest to members no longer an

employee

Retirement – calculate member’s benefits, record their

option and setup benefit account

Estimates - member’s potential retirement benefits

depending on scenarios they

request.

Service Purchase - produce a cost for

member to purchase service in system. Record receipt of funds and post

service to member’s account.

Fire and Rescue – a retirement plan that has the

same basic functions of other plans (retirements,

refunds, service purchase, etc.) but so different in rules

that essentially creates separate screens to

accommodate.

Service Audit – audit members account for service corrections

Annual Statements / 1099 / W-2 – get

copies of these online

Estimator – What If scenarios to estimate

retirement benefits

Beneficiary Designation –

Choose death benefit and Return of contributions

designee

Update Personal Info – EFT

information, email, phone number, home address (retiree only)

Employer – all employer contribution

reporting functions plus reports and some

functions to help service their employees

Health Insurance Enrollment – (In

Progress) – add, edit, or cancel health

insurance coverage


Disability – DIPNC & DRET – tracks all

applications and does benefit calcs.

Figure 16 ‐ RSD ‐ System to Business Process Mapping



86


2014 2015 2016 2017 2018Retirement Systems Division

ORBIT (Online Retirement Benefits through Integrated Technology) Enhance Enhance Enhance Enhance Enhance

MelissaData Smart Mover Maintain Maintain Maintain Maintain MaintainMicrosoft BizTalk Maintain Maintain Maintain Maintain MaintainAdobe Forms Maintain Maintain Maintain Replace SQL Server Reporting Services Maintain Maintain Maintain Maintain MaintainMapping Suite Maintain Replace SilentPrint Maintain Replace

RSD-IDMS - Retirement Integrated Document Management System Enhance Enhance Enhance Maintain Maintain

Retirement Data Warehouse Maintain Maintain Maintain Maintain MaintainSymposium - Call Center Maintain Replace Paper Tiger Maintain Maintain Maintain Maintain MaintainInteractive Voice Response Maintain Replace

Figure 17 ‐ RSD ‐ System Roadmap



87


Modifications to ORBIT for Firefighters' and Rescue Squad Workers' Pension Fund Work is underway on major enhancements to ORBIT to address management of the Firefighters' and Rescue

Squad Workers' Pension Fund. Analysis of requirements for enrollment and contribution intake have been

conducted, and the designs for modifications to the ORBIT Employer and Employee Self‐Service subsystems

are being developed. When complete, these modifications will allow members of the pension fund to more

accurately monitor their contribution and service history. It will also allow fire and rescue squads to submit

and manage rosters without the need for paper documentation. Analysis is being conducted on benefit

processes such as retirement, transfers, refunds, and death benefits.

Functionality will be delivered incrementally throughout 2015 with final completion of all work expected in

2016.

Complete Compliance Initiatives As stated earlier, DST IT and RSD have started work to address issues related to the administration and

benefits from the QEBA plan established for recipients of high benefit compensation. Work on this initiative

will conclude in later 2014 with the resolution of outstanding data integration issues and the generation of W‐

2 documents for recipients. Efforts are underway related to achieving compliance with Required Minimum

Distribution (RMD) rules. Members of the pension plans that are not in compliance with RMD rules have been

identified. These individuals will be contacted to begin withdrawals; however, provisions must be made to

accommodate benefit payments for individuals actively employed by the State. RSD and DST IT will also

explore avenues to identify the current whereabouts of individuals holding dormant retirement accounts.

Integration with the GDAC and/or other repositories of data may provide valuable information for contacting

individuals.

Activities toward compliance with new statutory obligations began at the conclusion of the 2014 General

Assembly session. Legislation has been analyzed for impact to existing systems and rough estimates of effort

are being developed. Over the remainder of the year, detailed business requirements will be developed from

further analysis of new laws and designs for ORBIT modifications will be developed. Implementation and

testing of system modifications will be concluded by the end of 2014. Enhancements related to pension

spiking, new vesting rules and the payment of interest upon withdrawal of contributions will be given the

highest priority.

Replace and/or Upgrade Aging Technology Systems Starting in September of 2014, DST IT will work with external vendors to upgrade the existing business

process automation software used by RSD. As there is no direct upgrade path for the version of workflow

software currently used by RSD and the version being implemented, this initiative will require significant

development efforts. Over 25 business processes are modeled in the current workflow system, and each of

these must be redeveloped for the new version of business process automation software. The software is not

only critical to managing process flows throughout RSD, it provides valuable insight into measures of efficient

and performance such as turnaround time and accuracy rate. Continuity of both the process and process

measurement functionality is key to success. This project is expected to be completed in 3Q 2015.

Following the implementation of the new version of workflow, DST IT and RSD will work to enhance the

processes modeled within the system. Tight integration between ORBIT and the workflow system has been a

design goal since the implementation of ORBIT and the new version of the software has the potential to



88

make this possible. This effort will be incremental, expected to begin in late 2015, but potentially running for

several years as ORBIT redevelopment efforts in key business processes are being considered upon

completion of efforts related to the Firefighters' and Rescue Squad Workers' Pension Fund.

DST is exploring alternative office space, as the Albemarle Building has been designated for a complete

internal renovation. As a part of moving to a new office, DST IT and RSD will be exploring possibilities for the

replacement of the current call center infrastructure. These efforts will address the aging IVR and Symposium

tools currently used by RSD. It is unclear whether or not DST will be able to leverage the State ITS telephone

network at a new office facility, and telephony limitations will be an important consideration in efforts related

to call center replacement. This work has started, and is expected to be completed in 3Q 2015.



89

Retirement Systems Division – 2015‐2017 Strategic Information Technology Initiatives

Complia

nce Initiative

sFire and Rescu

e Pen

sion M

odifications

Legacy System Replace

ment

Jan 2016‐June 2016Jun 2014‐Dec 2014 Jan 2015 – Jun 2015 Jul 2015 ‐Dec 2015

Complete QEBA Payroll

Implementation

Test and Deploy Self Service Modifications

Upgrade RSD‐IDMS Test Workflow Environment

Conduct Design of Benefit Processing

Modules

Define Requirements for Benefit Processing

Design and Develop Self‐Service Modifications

Plan for Data Migration

Develop Benefit Processing Modifications and Data MigrationWith Incremental Delivery

Re‐Develop Business Processes in New Workflow Environment

Develop Legislative Modifications

Research Potential Call Center Replacement

Options

Develop and Test In‐Process Data

Migration/Archive Legacy Data

Test and Deploy New Workflow Processes

Design RMD Modifications

Develop, Test and Deploy RMD Modifications

Implement New Call Center Solution

Implement New IVR System

Design Workflow Enhancements and ORBIT Integration

Develop Workflow Enhancements

Figure 18 – RSD ‐ 2015‐2017 Strategic IT Initiatives


90

State Health Plan

STATE HEALTH PLAN


91

Overview

The mission of the State Health Plan is to improve the

health and health care of North Carolina teachers,

state employees, retirees and their dependents, in a

financially sustainable manner, thereby serving as a

model to the people of North Carolina for improving

their health and well‐being.

The Plan provides health care coverage to

approximately 678,000 teachers and local school

personnel, state employees, retirees, current and

former lawmakers, state university and community

college faculty and staff, and their dependents. The

Plan’s goals include maintaining quality, accessible and

affordable health care for its members, ensuring fiscal

responsibility and transparency, enhancing member

health and wellness, providing high‐level customer

service and fostering a high‐performing organization.

The transition of the State Health Plan to the

Department of State Treasurer placed the

administration of health and retirement benefits under

one roof, allowing for improved communication and

coordination. It is envisioned that this change will

enable long‐range strategic planning to ensure the

sustainability of benefits, which was not possible in the

former structure. The State Treasurer, Executive

Administrator and Board of Trustees are designated as

fiduciaries for the Plan, with ultimate decision making

entrusted to the State Treasurer.

State Health Plan Structure

The State Health Plan provides health care coverage to

more than 678,000 teachers, state employees,

retirees, and their dependents.

Among total membership, there are:

More than 474,000 active employees and

dependents. Dependents include spouses and

children up to age 26.

More than 194,000 retirees and their

dependents.

More than 1,300 COBRA participants and their

dependents. The Consolidated Omnibus

Budget Reconciliation Act of 1985 (COBRA)

requires most employers with group health

plans to offer employees the opportunity to

continue their group health care coverage

temporarily under their employer’s plan if their

coverage otherwise would cease due to

termination, layoff or other change in

employment status.

The Plan offers three Preferred Provider Organization

(“PPO”) plans. These plans provide freedom of choice

among in‐network providers, lower out‐of‐pocket

costs and a strong emphasis on preventive health. Two

of the plans, the Consumer‐Directed Health Plan

(CDHP) and the Enhanced 80/20 Plan, offer financial

incentives for taking steps to improve health.

The Consumer‐Directed Health Plan (CDHP) is

a high‐deductible health plan that is

accompanied by a Health Reimbursement

Account (HRA). Preventive services and

medications are covered at 100%. Other

healthcare services are subject to a deductible

and 15% coinsurance. This plan includes the

ability to lower monthly premiums by

completing wellness activities, and members

also receive HRA credits for using certain

specialists and hospitals.

The Enhanced 80/20 Plan has higher premiums

in exchange for lower copays, coinsurance and

deductibles. Preventive services and

medications are covered at 100%. The plan

includes the ability to lower monthly

premiums by completing wellness activities,

and members also receive reduced copays for

using certain specialists and hospitals.

STATE HEALTH PLAN


92

The Traditional 70/30 Plan has lower premiums

in exchange for higher copays, coinsurance

and deductibles. Preventive services and

medications require the applicable copay

under this plan, which does not offer wellness

premium credits or other incentives.

In addition, the Plan offers coverage for Medicare

primary retirees. Retirees can select the Traditional

70/30 Plan above, or choose one of the following four

Medicare Advantage options:

Humana Group Medicare Advantage (PPO)

Base Plan

Humana Group Medicare Advantage (PPO)

Enhanced Plan

UnitedHealthcare Group Medicare Advantage

(PPO) Base Plan

UnitedHealthcare Group Medicare Advantage

(PPO) Enhanced Plan

These Medicare Advantage options include benefits

and services such as access to the SilverSneakers®

Fitness Program, a nurse help line and disease and

case management services.

Division Structure

The State Health Plan is dedicated to providing

members with an excellent customer experience and

convenient access to health and wellness programs.

The Plan is self‐insured and exempt from the

Employee Retirement Income Security Act (“ERISA”)

as a government‐sponsored plan.

The Plan is organized into several core sections to

most effectively administer member benefits and

costs. These sections are:

• Policy, Planning and Analysis

• Health Plan Operations

• Integrated Health Management

• Contracting and Legal Compliance

• Pharmacy

• Data Management and Analytics

Policy, Planning and Analysis

The Policy, Planning and Analysis section is

responsible for the development of Plan benefit design

and product options, including:

• The development of financial projections and

policy options

• Analysis of financial and operational

performance of the Plan as a whole and

individual products/benefit design options

• Review of overall Plan financial forecasts

related to benefit design, option selection and

member attributes

In addition, the section serves as primary contact for

external requests and relationships with the North

Carolina General Assembly, other governmental

bodies, and various stakeholder organizations. The

section serves the Plan and the Department of State

Treasurer as health care and health plan policy experts

and analysts, conducting research and providing

information as needed for the Plan, the Department,

the General Assembly and other external bodies.

Health Plan Operations

Health Plan Operations is primarily responsible for the

State Health Plan’s third party administrative services

agreement, including: customer service, member

eligibility, enrollment, claims and related services.

In conjunction with the Department of State

Treasurer, the Operations team is responsible for all

internal, external and member communications for the

Plan.

Integrated Health Management

Integrated Health Management (“IHM”) is responsible

for the population health management programs and

the Plan’s healthy living initiative, NC HealthSmart.

This program provides a continuum of health and

wellness supports and services for Plan members,

including: health promotion, worksite wellness, health

coaching, and disease and case management.

STATE HEALTH PLAN


93

Contracting and Legal Compliance

The Contracting and Legal Compliance section is

responsible for all State Health Plan contract

procurement, contract monitoring, regulatory

compliance and legal compliance. Nearly all the Plan’s

expenditures, nearly $2.85 billion for fiscal year 2013‐

14, are made through contractual agreements. These

agreements enable the Plan to provide comprehensive

health benefits for the more than 678,000 teachers,

state employees, retirees, and dependents covered by

the Plan.

Pharmacy

The Pharmacy section is responsible for the

management, development and enhancement of all

aspects of the Plan’s pharmacy contracts and

programs. This includes implementing strategic

pharmacy initiatives, overseeing the Plan’s pharmacy

benefit manager contract to ensure maximum

economic value, and managing the Plan’s Medicare

Part D program.

Data Management and Analytics

The Data Management and Analytics section is

responsible for oversight and management of the

Plan’s data warehouse, including the receipt, storage,

retrieval and transfer of data among the Plan and its

vendor partners as well as the collection,

management, use and analysis and communication of

data in order to generate statistical, financial and

clinical reports to assist the Plan in making data‐driven

business decisions.

STATE HEALTH PLAN


94


Integration and Expansion of Data Analytics with GDAC and NCFACTS In early 2013, the State Health Plan migrated the on‐premise SAS installation used for data warehousing and

analysis to the State of North Carolina Government Data Analytics Center (“GDAC”). Working with the GDAC

and Zencos, a SAS consulting firm, the SHP Data and Analytics team facilitated the direct integration of data

into the GDAC from vendors such as Blue Cross Blue Shield of North Carolina, ExpressScripts, and

Benefitfocus. With medical claim, pharmacy claim, and enrollment data imported directly into the GDAC’s

SAS installation, the SHP Data and Analytics team can focus on data management and analysis, rather than

the transformation and loading of data. The migration to the GDAC also provided a more reliable and stable

SAS environment. SHP data has also been made available to the North Carolina Fraud and Compliance

Technology System (“NCFACTS”) for the identification of potentially fraudulent activity by health plan

subscribers and/or providers.

Implementation of Truven Health Analytics for Benchmarking The State Health Plan partnered with the Department of Health and Human Services to implement Truven

Advantage Suite analytics tools. This hosted analytics and decision support tool aggregates claim and

enrollment data to provide insights into health plan operations such as effectiveness of care, effectiveness of

disease management, and financial risk. The tool provides for the grouping of services into a medical episode

for the evaluation of the appropriateness of procedures and interventions. As a third‐party data aggregator,

Truven is also able to provide the State Health Plan with benchmarking information for comparable health

benefit plans, allowing for performance comparison across the health care provider industry.

Operational Assessment of Data and Analytics Program The State Health Plan worked with the University of North Carolina ‐ School of Government, Center for

Public Technology, to conduct an assessment of the operational activities related to data and analytics. The

assessment identified opportunities for improvements in developing in‐house capacity for analytics and

decision‐support, potential areas for efficiency improvements in data collection and reporting, and

recommendations for strategic planning around the use of data and analytics in health plan operations. SHP

will be continuing this partnership with the UNC School of Government to conduct a collaborative

assessment that will review the objectives of the data and analytics program and issues surrounding data

governance. This consulting engagement will produce a strategy and proposed organizational model to serve

the analytics needs of the division, as well as an actionable plan towards achieving the goals emerging from

the collaborative assessment.

STATE HEALTH PLAN


95


Innovate and Modernize Operations – Communication Portal The State Health Plan is managing a large of number of vendors involved in claim processing, enrollment,

billing, and population health management. The Plan also coordinates the integration of hundreds of

employers with vendors to manage the provisioning of health care benefits to over 678,000 people. This

management and oversight involves a great deal of documentation, collaboration and data sharing.

The State Health Plan lacks the tools for cohesive, centralized management of documentation and

collaboration artifacts among the hundreds of stakeholders involved in health plan operations. E‐mail is a

weak solution for the distribution of materials, and severely lacking in the ability to transmit and secure

sensitive data that may need to be shared between claims administrators, agency human resource

departments, and SHP employees. SHP requires a robust communication portal, secured to meet HIPAA

compliance standards, yet accessible by any of the hundreds of people involved in health plan operations.

Innovate and Modernize Operations ‐ Report Management The use of Documentum for the management of reports from vendors has become a time‐consuming, labor‐

intensive process due to technical issues. The timely distribution of reports and the accurate, long‐term

storage of vendor reports are critical to monitoring health plan operations and auditing past performance.

The State Health Plan requires a new solution to handle the massive influx of reporting from multiple vendors

and the distribution of these reports to key individuals within the division. As with communication, e‐mail is a

poor substitute for a robust, automated system of cataloging reports and notifying people of their availability

in a timely manner.

Innovate and Modernize Operations – Expansion of Data and Analytics The data and analytics program of the State Health Plan has made significant progress in the construction of

an environment to support data‐driven decision making. In the Pharmacy area, the data repository has aided

a number of cost‐saving policy decisions. Integrated Health Management is expanding its analytics capacity

to utilize hospital admission, discharge and transfer data for population health management. The SHP data

repository is also critical to financial and actuarial analysis. This success was achieved during a massive

implementation of new health plan options such as Medicare Advantage involving several new vendors and a

migration of the SHP data repository to the GDAC.

SHP needs to continue to expand the use of analytics in plan operations, policy, and strategy, as well as

improve policies, practices, and personnel capabilities to meet expanded and more sophisticated needs. To

this end, an assessment of the SHP Data and Analytics strategy was conducted and many recommendations

were made in the assessment report. A collaborative assessment involving all stakeholders in SHP Data and

Analytics, including the Office of the State Treasurer, DST IT, and SHP management, will be conducted in

partnership with the UNC School of Government. Reviewing the recommendations of the operational study

and the collaborative assessment and acting upon them to increase the maturity of the data and analytics

program will be a major initiative of SHP over the next two years.

STATE HEALTH PLAN


96

Current System Portfolio and Operational Activities The Application Portfolio of the State Health Plan Division supports the business operations of the division.


processes to systems is provided in Figure 19 ‐ SHP ‐ System to Business Process Mapping. The 2014‐2018

Application Roadmap for the division is provided in Figure 20 ‐ SHP ‐ System Roadmap.

SAS w/Enterprise Guide – Health Care Analytics The State Health Plan has utilized the State of North Carolina Government Data Analytics Center (GDAC) to

provide a SAS infrastructure for the storage and analysis of plan data.

The intent of this system is to create a robust data reporting infrastructure controlled by SHP and empower

employees to create their own reports and analysis and use data at their discretion. By controlling the data

reporting infrastructure, SHP will have the flexibility to change its reporting and analytics quickly, without

relying on modifications from contracted vendors.

Data from Blue Cross Blue Shield of NC (BCBSNC) regarding medical claims and data from ExpressScripts

regarding pharmacy claims are provided directly to the SHP data repository hosted by the GDAC. Reports

and dashboards from this data are developed by SHP, in conjunction with Zencos, and used by the division for

decision making and analysis of plan operations.

Truven Health Analytics – Analytics and Benchmarking SHP partnered with the NC Department of Health and Human Services – Office of Medicaid Management

Information Systems Services to implement Truven Advantage Suite for additional health plan analytics.

Advantage Suite is a data repository and reporting system designed to integrate with multiple sources of data

in different formats to enable financial reporting and management reporting, as well as drive medical policy.

The analytics capabilities include predicative modeling for disease management and the integration of claims

into a single episode of care for more robust clinical analyst. Truven also offers benchmarking capabilities,

allowing the State Health Plan to compare plan performance against similar plans.

Documentum – Report Management Documentum is an electronic document management system offered to State agencies as a hosted service

by the Office of Information Technology Services (OITS). Documentum offers multiple document

management solutions and the system utilized by OITS is based on Documentum’s Content Server software,

NOT the Documentum ApplicationXtender solution utilized by the Unclaimed Property and Escheats Division

(“UPP”) and the Retirement Systems Division (RSD). SHP utilizes Documentum for the storage of electronic

reports received from BCBSNC and other contracted vendors. In the past, the filing of the electronic reports

was automated by customizations created by OITS. Since these customizations are no longer functional, SHP

is pursuing an alternate document management platform, most likely leveraging the DST SharePoint

infrastructure.

STATE HEALTH PLAN


97


STATE HEALTH PLAN DIVISION

SAS w/ENTERPRISE GUIDE

(Hosted by GDAC)

Extract-Transform-Load claim records for medical services from BCBSNC and pharmacy services

from ExpressScripts

TRUVEN HEALTH ANALYTICS

(Hosted by Truven)

Group data into Medical Episodes


Provide benchmarking on Plan financial and health outcome

performance relative to similar plans.

Provide reports on contract expiration, deliverable status,

and other contract-related processes

Provide a framework for reporting utilization and

other key measures of the health care service

contracts

Provide a toolkit for the actuarial valuation of the

Health Plan Fund by contracted actuarial

consultants.

EMC DOCUMENTUM(Hosted by ITS)

Storage of reports produced by BCBSNC and other

vendors.

Figure 19 ‐ SHP ‐ System to Business Process Mapping

STATE HEALTH PLAN


98


2014 2015 2016 2017 2018State Health Plan Division

SAS - Healthcare Analytics Enhance Enhance Enhance Maintain MaintainTruven Health Analytics Maintain Maintain Maintain Maintain MaintainEMC Documentum Maintain Replace

Figure 20 ‐ SHP ‐ System Roadmap

STATE HEALTH PLAN


99


Develop an Extranet Portal for Collaboration with External Vendors Coordinating the efforts of multiple vendors for the delivery of health plan services is no easy feat. In addition

to the numerous vendors involved in enrollment, claim processing, billing, and disease management, the SHP

must also coordinate the activities of the State’s largest employers to ensure seamless delivery of benefits to

employees of the State of North Carolina, the University of North Carolina System, and over 100 local

education units.

SHP requires a digital platform to facilitate this coordinated effort. The Department of State Treasurer has

implemented SharePoint as a web content management platform for departmental Intranet and Internet

websites. The agency has also made use of SharePoint team sites as collaborative workspaces for internal

project teams. In conjunction with SHP, the DST IT will expand this capability to external users, via an

extranet portal.

Security is of paramount importance in this initiative, due to the status of SHP as a HIPAA Covered Entity.

Authentication of external users is one of the biggest challenges associated with extending the digital

platform beyond DST. Integration with NCID may address this challenge, and this will be a design goal of the

new initiative. Work on this initiative is under way with completion expected by 4Q 2015.

Replacement of Documentum with New Report Management Portal The manual effort involved in managing plan reports in the OITS Documentum environment is both time‐

consuming and conducive to error. Since the accurate storage and distribution of vendor reports are critical to

plan operations, SHP seeks to replace the existing system as soon as possible.

This initiative will involve the development of a new report repository, likely leveraging the existing DST

SharePoint infrastructure. It will be necessary to redevelop the automated routing, filing, and notification

processes that previously existed in the Documentum environment. It will also be necessary to provide for an

automated migration of existing reports from Documentum into the new report repository. Once these steps

are concluded, not only will SHP have a more robust framework for managing vendor reports, but the agency

also will realize cost‐savings by terminating the OITS Documentum service.

Work on this initiative is expected to begin before the end of 2014, with completion near the end of 2Q 2016.

Execute Data and Analytics Strategy The assessment of the SHP Data and Analytics program calls for a strategic review of the program’s goals,

initiatives and resources. This strategic analysis should determine a plan for personnel resourcing, vendor

relationship management relative to data sourcing, integration and hosting, and application of data analytics

for plan management and decision support. SHP is planning for this strategic review, and it should be

completed no later than the end of 2Q 2015.

Until the review is complete, it is difficult to ascertain what specific initiatives will emerge from the new data

and analytics strategy. It is clear from the preliminary assessment that there will be a role for DST IT in the

implementation of the strategic recommendations. It is also likely that this work will continue through the

end of 2016 and beyond.

STATE HEALTH PLAN


100

State Health Plan Division – 2015‐2017 Strategic Information Technology Initiatives

Extranet Portal

Exe

cute Data

Analytics

Strategy

Report

Man

agemen

t Portal


Conclude Operational Assessment

Conduct Strategy Review and Analyze

Findings

Implement Long‐Term Activities Defined in Plan

Review NCID Integration with FlexCube for

Lessons Learned

Develop Integration with NCID for Extranet Portal

Collect Requirements for Report Portal

Develop Structure for New Report

Portal

Develop Automation for Report Filing

Pilot for New Reports

Pilot with Subset of Vendors and External

Stakeholders

Migrate Existing Report Repository

Data

Full Implementation of Extranet Portal

Develop Action Plan Based on Strategic

Review

Implement Short‐Term Activities Defined in Plan

Figure 21 ‐ SHP ‐ 2015‐2017 Strategic IT Initiatives



101

Information Technology Division



102

Overview

The Information Technology (“IT”) Division’s mission is to deliver comprehensive technology solutions that

allow the Department of State Treasurer (“DST”) to achieve a fiscally sound and prosperous North Carolina.

Strategic Goals

Maintain a stable and secure IT

infrastructure to support business

operations.

Deliver and support reliable and high‐

performing business technology systems

utilized by DST divisions in the execution of

operations.

Secure DST information and systems by

employing risk management, policies,

monitoring and detection security services,

audits and reviews.

Plan, design and implement new technology

solutions to meet changing business needs

and objectives

Procure and manage contractual

relationships with technology and staffing

vendors critical to the delivery of IT services.

Securely manage and deliver the data

components of DST operations and

integrated systems and coordinate the

analysis of data for business decision

making.

Strategic Objectives

Reduce risk by executing at least 80% of the defined project portfolio within three years, with

90% of all initiatives focused on edifying existing technology systems and 10% of all initiatives

focused on innovative activities developing new IT services for the Department.

Lead departmental initiatives in data analytics and, within one year, have developed a

comprehensive strategy with staffing recommendations, budget recommendations, and the

In each of the initiatives discussed

throughout the Strategic Plan, the

important measurements of value or

success are driven by the business

unit, not the IT Division.

Even when IT meets targets for the

delivery of business requirements

on‐time and within budget;

however, the impact of those

requirements ultimately determine s

the value and success of the

initiative.

The IT Division seeks to target

specific measurable targets in the

delivery of IT services, regardless of

the specifics of the service being

delivered or the division being

served; however, due to the nature

of the IT Division as a support

organization, successful satisfaction

of measurement targets – doing

things “right”, does not always

result in meeting important

departmental strategic goals – doing

the “right things.”



103

identification of key retrospective measurements for each division, and key predicative

measurements for at least two divisions.

Implement initiatives in the project portfolio meeting project planning targets of +/‐ 10% in

budget, scheduling, and defined requirements in the interest of customer service.

Reduce risks and have 95% of all business systems on vendor‐supported software platforms by

the end of the 2016 calendar year.

Lower support costs, reduce risk, and increase operational efficiencies by moving all database

servers except for ORBIT and Core Banking to a virtualized platform by the end of 2016.

Key Operational Metrics In addition to the strategic objectives, the IT Division seeks to meet the following key operational goals in

2015‐2017.

• Response to 99% of Very High/Emergency Tickets within one hour, and 99% of High Tickets within

four hours.

• Ticket closure with incident resolution not prompting a re‐opened ticket in 95% of all incident reports.

• Critical system uptime of 99% during business hours minus scheduled maintenance.

• Ontime completion of all HR‐assigned training.

• Ontime completion of all HR‐related documentation (reviews, work plans, etc.)

• Customer Rating of 4‐star or higher for 90% of rated Helpdesk tickets.

• Annual IT Customer Survey Results to be positive (80% and above) for quality, timeliness,

professionalism and helpfulness.

• IT Division Employee Engagement results to be 3.00 or higher in all areas.

• Zero Information Security Breaches/100% Security Event Prevention or Detection

• Successful test with user acceptance of the recovery of 100% of all systems supporting essential

business functions at least once every 12 months.



104

Organization and Staffing The IT Division of the Department of State Treasurer is led by the Chief Information Officer, a Deputy State

Treasurer that reports to the State Treasurer through her Chief of Staff. The Chief Information Officer is

William V. Golden.

The division is organized around three functional areas. Technical Services is responsible for the technology

infrastructure of the department, including items such as networking, storage, servers, virtualization,

backup/recovery, and management of the physical data center. The group also supports department‐wide

systems such as e‐mail. Desktop support functions, such as construction and maintenance of desktop and

laptop hardware, are the responsibility of Technical Services. This team is directed by the Manager of

Technical Services.

Systems Development oversees the procurement, implementation, and maintenance of the business

application portfolio of the department. Business applications specific to a division, such as the Retirement

Systems Division’s (“RSD”) ORBIT retirement management system and Financial Operations Division’s

(“FOD”) Core Banking system, are managed by systems developers in this section. Database administration

and management is also the responsibility of Systems Development. The team is directed by the Manager of

Systems Development.

Information Security manages the IT Information Security Program – the policies and guidelines for the

secure operation and delivery of technology services. The team is also responsible for reviewing the existence

and reliability of IT security controls and assessing risk to systems from procedural, legal, technical, and

physical shortcomings. The Information Security team also directs threat management and incident response

to security events through malware and virus protection, hardening policies, firewall and network intrusion

monitoring and prevention vulnerability assessment. The Information Security team is also responsible for

the DST Business Continuity and Disaster Recovery strategy. The team is directed by the Information

Security Officer.

A complete organizational chart is provided in Appendix A.

Information Security

The Information Security Team comprises members led by Information Security Officer (“ISO”). Risk

Management, policies and compliance are mostly managed by the ISO; implementation, support and

maintenance of IT Security Technology services are managed by the Network Security Specialist with the

assistance of a Network Security Analyst. All IT Technology Security services are deployed agency wide.

They include, but are not limited to the following, firewall/VPN maintenance & administration, endpoint

security, which includes, malware and rogue host detection and prevention, integrity control management,

Microsoft Active Directory policy management, mobile device management (encryption, security

configuration) and host hardening. The team also provides vulnerability detection systems and provides

leadership and oversight on mitigation activities. All security events are monitored, analyzed and evaluated

for potential security incidents. The ISO is also responsible for setting strategic direction for business

continuity.



105

Systems Development

The Systems Development Team comprises 27 full‐time members, divided into five groups, each led by a

Development Supervisor. Each team focuses on services for a specific division or division(s), and the team

specializes in technical acumen and/or business knowledge that serve the divisions they support.

The Retirement Development Team is the largest development group, co‐managed by two supervisors.

Composed of 11 full‐time developers, this team supports all business applications of RSD, most notably,

ORBIT. ORBIT is used by RSD for the management of all retirement systems and activities related to them,

such as retiree payroll, employer reporting and contribution management, refunds, service purchases, and

death and disability benefit processing. The team also supports the IT Division’s Helpdesk system.

The Core Banking Development Team comprises four developers, including their Development Supervisor.

This team is responsible for the maintenance and operation of Core Banking, the statewide banking platform

operated by the FOD. This system is critical to statewide deposit and payment management. They also

oversee the applications utilized by the Retirement Accounting Section of FOD.

The Web Development Support Team comprises five developers, including their Development Supervisor.

This team is responsible for the maintenance and operation of the department’s web content management

system, NCTreasurer.com, the department’s Intranet infrastructure, and web analytics and support tools.

They also develop and support applications for the Unclaimed Property Division, such as Wagers, the Escheat

Fund Management System, and UPD‐IDMS, the Unclaimed Property imaging and workflow system. This

team also provides IT assistance and support to the Investment Management Division, supports RSD’s

document management and workflow system, and supports FOD’s LibertyNet system.

The Database Development and Administration Team oversees the data infrastructure of the department,

and comprises four database administrators and developers, including their Development Supervisor, and

one developer specialized in State and Local Government Finance Division (“SLGFD”) applications. In

addition to maintaining the data infrastructure through monitoring, index management, space utilization

monitoring and projection, and backup and recovery, the team provides design support to the application

development group. This team is also responsible for the development of data analysis services and

supporting functions such as reports, data warehouses and marts, and ETL processes, most notably, RSD’s

data warehouse. The team also supports the business applications of the State and Local Government

Finance Division, including their audit management system, their debt management system, and their

reporting infrastructure.

Technical Services

The Technical Services Team comprises 18 members, divided into three groups, each led by a Technical

Services Supervisor.

The Tier I Enterprise Support Team is the largest technical group comprising eight technicians including the

Enterprise Support Supervisor. This team supports all desktop applications for the Department of State

Treasurer including the client‐side components of core business systems such as ORBIT, Core Banking,

Wagers, AutoAudit, and Bloomberg. In addition, the team supports third party enterprise solutions including

Microsoft Office, Adobe Suite, PatchLink, Malware Protection, Antivirus, and desktop encryption. The team



106

is responsible for providing first level Helpdesk support to all divisions within the Department of State

Treasurer.

The Tier II Desktop‐Server Support Team comprises five technicians including the Technical Support

Supervisor. This team provides advanced desktop support to Tier I and basic server and infrastructure

support for the department’s infrastructure areas. The team is responsible for Active Directory services,

department backups/restores, Terminal Servers, Print Services, infrastructure patch management, and bi‐

annual Disaster Recovery testing. The team is responsible for providing advanced Helpdesk support to all

divisions within the Department of State Treasurer.

The Tier III Infrastructure Support comprises five technicians including the Technical Support Supervisor. This

team provides advanced support to Tier I and Tier II. The team is responsible for all infrastructure areas

including network, advanced Active Directory, Email, SAN/NAS, Fax Services, WAN, Data Center

management and Disaster Recovery planning and testing. The team is responsible for infrastructure design,

planning and implementation.



107


Information Technology Operational Review In 2014, the Department of State Treasurer commissioned an independent review of the operational

practices of the Information Technology Division. A team from the Center for Public Technology at the

University of North Carolina School of Government, and their associated external subcontractors, conducted

this review.

Information regarding the IT Division was collected through interviews with key Department leadership, IT

staff, and external stakeholders. Documents, including the Departmental strategic plan, the 2013‐2015 IT

Strategic Plan, the IT Operating Model, and documented procedures and policies were also reviewed to

assess the division’s practices and operating environment. Lastly, industry best practices were evaluated and

peer interviews with other private‐sector and state agency IT leaders were conducted to establish benchmark

practices for IT operations.

The review highlighted the successful efforts of the IT Division in the application of technology solutions that

enhanced overall Departmental operational efficiency and customer service and responsiveness. The review

also called attention to the extremely low operating costs associated with IT service delivery, when compared

with other large pension programs of similar size. The IT Division was recognized for a commitment to sound

operational practices and overall employee satisfaction.

In outlining areas for improvement, the IT Operational Review indicated that the IT Division is significantly

understaffed in relation to the current operational burden and the agency’s desires for expanded technology

solutions. Communication between the IT Division and the other DST divisions has been deficient, stemming

from a lack of staff dedicated solely to business relationship and service‐level management. Processes and

tools for service delivery were cited as areas for improvement, as well as an increased focus on technology

innovation beyond mere maintenance.

The most significant finding in the review was the lack of overall IT governance within the Department of

State Treasurer. With seven divisions effectively competing for the limited resources of the IT Division, the

agency lacks formal structures, policies and procedures for the overall management of the IT project

portfolio. The review called for the creation of a formal IT Governance structure as a precursor to almost all

other recommendations contained in the report. Formal processes for project justification, review, and

prioritization must be established, as well as centralized project management for enterprise resource

management, including funding.

The final report of the IT Operational Review was delivered to DST in April of 2014. The implementation of

the recommendations contained therein represents one of the major initiatives for the IT Division and the

Department of State Treasurer, over the next two years and beyond.

Maintaining and Securing the Enterprise Since 2012, the IT Division has made great advances in the management and security of the DST Information

Technology enterprise. In 2014, under the leadership of the ISO, the Department instituted new procedures

for application access control. Prior to this, new employees of the agency would often have to wait weeks

while access to necessary technology systems was worked out between IT staff and business unit



108

management. At the same time, a communication disconnect between DST Human Resources and the IT

Division created gaps where access to systems was not immediately terminated when an individual left

employment. New processes for onboarding and off‐ boarding staff were introduced that improved the

quality of initial access setup for new employees and bridged the gap between IT and HR, ensuring quicker

discontinuation of system access.

Storage and retention of electronic mail has long been a challenge for DST. The IT Division could not allow

online mailboxes to become too large; it would cripple the operation of the DST electronic mail server and

make e‐mail practically unusable at remote offices. Faced with space limitations, users were frequently

archiving e‐mail into offline file stores. These mailbox files consumed a tremendous amount of disk space and

were subject to data corruption and loss as they increased in size with more archived messages. The IT

Division has been upgrading the mail server used by the agency to Microsoft Exchange 2010, and as part of

the upgrade project, saw an opportunity to correct these longstanding issues with mail archiving. In August of

2014, the IT Division implemented Symantec Enterprise Vault as a part of the agency’s e‐mail infrastructure.

Enterprise Vault allows for the online archiving of electronic mail messages into a centrally‐hosted data

repository. By moving messages from Microsoft Exchange to Enterprise Vault, the operational integrity of

the e‐mail server is maintained. The use of the centralized repository for mail archiving allows for file

backups, more responsive searching, and the recovery of file space on local laptops and desktops. The

Enterprise Vault also utilizes de‐duplication technology, to avoid storing the same message multiple times, a

much more efficient method of archiving.

The IT Division also took a number of steps in the past two years to improve the network capabilities of DST

in both the Albemarle Building and at remote sites. The DST Core Network Switch was replaced, improving

performance and reliability across the entire network. Long‐standing issues with network traffic at the

remote SLGFD site were addressed through effective monitoring of network traffic and re‐architecting the

setup of key business applications. A service for wireless access was setup in three conference rooms that

allows external users to utilize the Internet without compromising DST network security. In addition to

improving network capabilities, the IT Division also replaced the agency’s Storage Area Network (SAN)

device, increasing the capacity for electronic data and document storage for the entire agency.

Recruiting and Retaining IT Talent The last two years have seen significant turnover among IT Division personnel. As the economy rebounded

from the 2008 Financial Crisis and Great Recession, an increase in job opportunities and technology salaries in

the Raleigh area proved attractive to a number of IT staff, especially after years of wage stagnation. At the

same time, older workers saw recovery in retirement investment portfolios and housing prices and felt more

secure about leaving the workforce for retirement. In the last two years, the IT Division experienced turnover

in over 25% of all permanent, full‐time positions.

The IT Division took a number of steps to increase their competitiveness in the technology job market and

improve the conditions for existing staff, all without sacrificing the high quality and caliber of the division

staff. First, the turnover in staff created a number of opportunities for advancement among long‐time IT

Division employees. Since 2012, seven staff members have been promoted or advanced along their career

band, in recognition of their advanced technical skills and acumen with the business practices of the agency.



109

Second, the IT Division, in partnership with DST Human Resources, reviewed hiring practices and revised

vacancy announcements, leveraged alternative methods of advertising vacancies, and standardized

communication with potential job candidates. The IT Division made a concerted effort to highlight the appeal

of employment with DST and stress the value proposition of State employment and public service, while

clarifying issues around salary, benefits, and other aspects of State employment unclear to external

candidates.

Lastly, in combination with Department’s annual employee engagement survey, the IT Division undertook a

comprehensive initiative to address employee concerns highlighted in the survey and associated focus group

discussion. The IT Division initiated a program of “Lunch‐and‐Learn” sessions to encourage open lines of

communication among different technical teams and allow groups to showcase and highlight their

contribution to DST to their peers. The IT Division began using Compass, the DST Intranet, to share more

information with staff about departmental initiatives and projects. Training opportunities for staff were

reviewed and communicated to the division, and through the direct efforts of the CIO, a covered, non‐

smoking outdoor break area for employees was established.



110


Maximize the Talent of our People – Department of State Treasurer Office Move and Consolidation In 2014, the Department of State Treasurer was authorized to enter into a lease for new office space. This will

permit the entire department, currently housed in five separate buildings, to consolidate operations and staff

into a single office complex. This move and consolidation represents an opportunity to increase staff

collaboration and communication to produce better service outcomes for North Carolina citizens and

constituents. For instance, the two largest State employee benefit programs: the Teachers’ and State

Employees’ Retirement System and the State Health Plan of North Carolina, are both under the

administration of the State Treasurer; however, are housed in different buildings. After this move, staff from

both divisions will be able to work side‐by‐side on member communication, policy development, and

program administration to benefit of the hundreds of thousands of members than participate in both the

pension and health insurance benefit programs.

While the building move and consolidation is expected to yield positive benefits for the Department of State

Treasurer, it must be conducted quickly. The General Assembly has approved $42 million for a complete

overhaul of the Albemarle Building, the largest of the five DST sites. The Department of Administration

intends to begin this construction project in 2015, and DST must vacate the building prior to the start of

construction. In addition to staff, the Albemarle Data Center, used by DST since the 1970’s, will also have to

be moved from the building.

The IT Division has started to evaluate potential alternatives to the Albemarle Data Center, including floor

hosting at an OITS facility, floor hosting at a commercial data center, and the construction of a small data

center facility at the new office complex. Although the move to the new facility must occur quickly, the move

to the new building must be conducted with minimal interruption and risk to departmental operations.

Retiree payroll, State banking operations, and the other critical functions of DST must continue throughout

the move, expected to take several months.

Innovate and Modernize Operations – Improve Service Delivery Among the recommendations of the IT Operational Study, the IT Division must improve its service delivery

across the entire agency. While the governance challenges described earlier must be addressed in partnership

with DST leadership, there are several areas for improvement that are the sole province of the IT Division.

First, the IT Division needs individuals solely committed to business relationship management. As described

in the study, business relationship managers “work closely with divisions, developing knowledge and

understanding of their business processes, objectives, and technology needs” in order to effectively manage

the deployment of technology from IT to divisions. Today, this is a shared responsibility among all IT Division

supervisors and the results are varied.

The Helpdesk model used by the IT Division is not consistent with industry best practices, resulting in poor

service and tainting the general perception of the division among the user community. Much of this can be

attributed to a lack of clarity of roles and responsibilities in the service delivery model, a lack of well‐

documented procedures, and insufficient tools for performance measurement. The broad responsibilities

assigned to IT Division staff result in deficiencies in service delivery, as individuals are often called upon to be

business relationship managers, project managers, supervisors, developers, and technical support



111

representatives – a difficult combination of skills for a single individual to perform well. Inadequacies in

communication, both within the IT Division and to other divisions in the agency, occasionally result in

inconsistent expectations and frustration for both IT staff and service customers.

It will be important for the IT Division to address these organizational issues over the next two years. The IT

Operational Study has provided solid recommendations for corrective action; however, the building move will

likely draw attention from this effort and delay significant progress. The IT Division will need to remain

focused on operational excellence throughout the building move, even if progress made is minor. Incremental

improvement will yield positive rewards across the entire organization.

Enhance Accountability of Department Services – Analytics The Department of State Treasurer seeks to utilize data analytics more expansively in agency operations and

the IT Division plays an important role in meeting this requirement. Before each division can embrace data‐

driven decision making in normal operational practices, analysts across the department must have the tools

necessary to access business data to inform decision making. The IT Division has been deploying a number of

tools across the agency, such as Microsoft PowerQuery for SLGFD and MATLAB for IMD, to aid in data

analysis. It is unlikely that any single toolkit will meet the needs of each division and the IT Division must

continue to keep abreast of developments in the industry and apply the appropriate technologies to each

specific analytics challenge. Leveraging the resources of the Government Data Analytics Center (GDAC) to

assist in the development and support of analytics platforms for SHP has also been an effective strategy that

should be considered for other divisions.

The IT Operational Study identified deficiencies in the staff capacity to implement and support division‐wide

data analytics. DST has neither enough staff, nor staff with the appropriate skills, to successfully conduct

enterprise‐wide data management, analytics, visualization, and reporting. Working across the entire agency,

the IT Division must formulate a strategy to address these personnel needs, through new positions and

training opportunities for existing staff. By addressing both the skills and capacity gaps that exist within the

organization, the agency should be poised to make rapid advancement towards the integration of analytics

across all department operations.

SHP is currently conducting a strategic evaluation of their analytics program. In addition to defining and

prioritizing divisional initiatives around analytics, they are performing a comprehensive review of resourcing,

including staff, skills, tools, and data used in analysis. The division is also defining governance structures for

the ongoing oversight and prioritization of analytics projects to ensure continued value from initiatives and

clarify priorities across the organization. This work being conducted in SHP may potentially serve as a model

for other divisions that are seeking to bring more order to their analytics programs.



112

Current System Portfolio

Information Technology Division – Departmental Infrastructure Portfolio

Exchange Microsoft Exchange is an Enterprise platform for e‐mail, calendaring, contacts,

task, and unified messaging. Outlook and OWA provide the user interface that

integrates with the Exchange backend.

Commvault Commvault Simpana is an Enterprise backup and recovery solution. Simpana

provides secure tape backups by using encryption technology.

Enterprise Vault Symantec Enterprise Vault is an archiving solution to store, manage and discover

critical business information.

SCCM System Center Configuration Manager is an Enterprise solution used to create

standard desktop images for software deployment.

HP SIM HP SIM provides proactive notification of actual or impending hardware failures

in the server environment. SIM automatically notifies HP of failures via e‐mail,

pager, or SMS.

DameWare DameWare provides remote access to servers, desktop and laptops so that the IT

staff can quickly support the end‐user community.

Storage Manager SolarWinds provides data storage monitoring and management for the EMC 480

SAN. SolarWinds monitors storage performance, isolates hotspots, automates

storage capacity planning, maps VMs to physical storage, analyzes storage

usage, reclaims storage space, manages fiber channel switches, and gains

visibility into the SAN fabric.

WhatsUp Gold WhatsUp Gold is a network management solution designed to monitor networks.

Kiwi CatTool Kiwi CatTool is a configuration management and network automation tool that is

used to manage network switches.

ZixGateway ZixGateway is used as an enterprise e‐mail encryption solution.

Securance Securance is an e‐mail filtering (anti‐spam filter, antivirus software) solution that

includes e‐mail protection and security services

Serv‐U Serv‐U is a secure FTP file transfer software

GFI Faxmaker Enterprise fax solution allowing users to receive and send faxes directly from

their email client.

VMware vCenter VMware vCenter is a centralized management tool for the vSphere suite.

VMware vCenter Server allows for the management of multiple ESX servers and

virtual machines (VMs) from a centralized console.

Lumension Lumension is a patch management and remediation software that identifies and

patches vulnerabilities across servers, desktops and laptops.



113

Wireshark Wireshark is a network monitoring tool that analyzes network activity at protocol

levels.

Information Technology Division – Business Application Portfolio

Project Server Microsoft Project Server 2010 is used by the Information Technology Division in

the management of large, multi‐group projects to track and monitor task

progress and resource utilization.

Team Foundation

Server

Microsoft Team Foundation Server (“TFS”) is used by the Systems Development

group for the storage and management of source code for all in‐house developed

business applications and customizations, including application code and

database scripts. The tool is also used in the automated build process of ORBIT.

Helpdesk Helpdesk 3.0 is an in‐house developed application used by the Information

Technology Division to accept support requests and incident reports from end‐

users and route and monitor incident responses by IT team members.



114

Information Technology Division – Infrastructure Roadmap

2014 2015 2016 2017 2018Hardware and Devices

Core Network Switch Maintain Enhance Maintain Maintain MaintainStorage Area Network Switches Maintain Enhance Maintain Maintain MaintainEMC SAN - Raleigh Maintain Enhance Maintain Maintain MaintainEMC SAN - WDC Maintain Maintain MaintainDesktops/Laptops (SHP, OST, SLG, UPD) Maintain Maintain Enhance Maintain MaintainDesktops/Laptops (RSD) Maintain Maintain Maintain Enhance MaintainDesktops/Laptops (FOD, IMD) Maintain Maintain Maintain Maintain EnhanceVirtual Hosts - Infrastructure Cluster* Maintain Enhance Maintain Maintain MaintainVirtual Hosts - Application Cluster ** Maintain Enhance Maintain Maintain MaintainVirtual Hosts - WDC*** Enhance Enhance Maintain Maintain MaintainVirtual Host - DMZ**** Maintain Enhance Maintain Maintain MaintainDDR Maintain Maintain Maintain Maintain ReplaceADIC Maintain Maintain Enhance Maintain MaintainRecovery Point Maintain Maintain MaintainCentera Maintain Maintain Maintain Replace

Infrastructure SoftwareMicrosoft Exchange Enhance Maintain Maintain Maintain MaintainMicrosoft SCCM Enhance Enhance Maintain Maintain MaintainVMWare Maintain Maintain Enhance Maintain MaintainMicrosoft Office Suite Maintain Maintain Enhance Enhance MaintainEnterprise Vault Maintain Maintain Enhance Maintain MaintainActive Directory Maintain Maintain Maintain Maintain MaintainZixGateway Enhance Maintain Maintain Maintain MaintainLumension Enhance Maintain Maintain Enhance MaintainStorage Manager Enhance Enhance Enhance Enhance EnhanceServ-U Enhance Maintain Maintain Enhance MaintainWhat's Up Gold Enhance Enhance Enhance Enhance EnhanceCommvault Enhance Maintain Maintain Maintain EnhanceKiwi CatTool Enhance Maintain Enhance Maintain EnhanceDameware Maintain Maintain Enhance Maintain MaintainGFI Faxmaker Enhance Maintain Maintain Maintain MaintainWireshark Maintain Maintain Maintain Maintain MaintainSecurance Maintain Maintain Maintain Maintain MaintainHP SIM Maintain Maintain Maintain Maintain MaintainSite Recovery Manager Maintain Maintain

* 5 Blade Servers** 9 Blade Servers*** 3 Blade Servers**** 4 Blade Servers

Department of State Treasurer - Infrastructure Roadmap



115

Information Technology Division – Application Roadmap

2014 2015 2016 2017 2018Information Technology Division

Helpdesk Enhance Maintain ReplaceMicrosoft Team Foundation Server Enhance Maintain Maintain Maintain MaintainMicrosoft Project Server Enhance Maintain Maintain Maintain MaintainSQL Server Reporting Services Maintain Enhance Maintain Maintain Maintain




116


Execute a Successful Building Move and Office Consolidation The most pressing challenge for the IT Division over the next 4‐12 months is the execution of a successful

move of the Department of State Treasurer and consolidation of all business units in a single facility. The

agency must vacate the Albemarle Data Center as quickly as possible and without disruption to critical

business operations. A rapid evaluation of available options and alternatives to the Albemarle Data Center

must be completed by January 2015, although strategies regarding DST IT infrastructure may be revisited at a

later time.

Since the move of the eight divisions of DST to a single facility must be conducted without impact to normal

operations, it will be conducted in phases. The execution of this move must be timed to key operational

periods – banking holidays, retiree payroll, and reporting deadlines are just a few of the activities that must

be taken under consideration. Some business systems cannot be “moved” – parallel systems must be setup at

and existing systems migrated to the new environment. Since the division has already made great advances

in server virtualization, the move may require a parallel SAN device to be replicated with the existing device in

the Albemarle Data Center as systems are migrated. Where necessary, the implementation of parallel

systems may create opportunities to upgrade existing system components as a new environment is

constructed. The IT Division will seek to leverage Windows Server 2012 and SQL Server 2014 as core system

software on upgraded systems.

When the move is complete and all systems are migrated, any duplicate hardware purchased for the

transition period will be placed to service in the agency’s Disaster Recovery environment. A “hot site” for

disaster recovery, constructed to assume agency operations within minutes, has long been a goal for DST. By

moving excess equipment to the Western Data Center (WDC), DST will begin to have an environment ready

to support this type of recovery.

Alternate Methods of System Delivery When the Albemarle Data Center is vacated, as part of the development of a long‐term strategy around data

center operations, the DST IT Division will conduct a comprehensive review of all existing systems. Legacy

systems of minimal use will be scheduled for retirement or have functionality migrated to other existing

systems. The division will accelerate its server virtualization program. With all application servers targeted for

virtualization by the end of 2015, the division will begin the evaluation process for the migration of database

systems. It is anticipated that all but the two of the five database clusters used by DST can be virtualized. The

IT Division will also be evaluating Software‐as‐a‐Service (SaaS) and Infrastructure‐as‐a‐Service (IaaS)

alternatives to traditional on‐premise deployments for ancillary business applications. DST’s Microsoft

Dynamics GP installation, SharePoint installation, and potential new Helpdesk system are all strong

candidates for off‐premise operation. An evaluation of Office 365 with Exchange Online will also be

conducted as part of this effort.

Implement the Recommendations of the IT Operational Review

Implementing the recommendations of the IT Operational Review will be the predominate activity of the IT

Division at the conclusion of the building move. The recommendations put forth in the study call for activities



117

to improve service delivery, implement governance structures and processes, create stronger alignment with

business units, and expand the services delivered to DST.

In order to improve service delivery, the division will conduct a comprehensive overhaul of the processes and

tools used in operational activities. Using the ITIL Framework as a guide, processes around incident

management and service request management will be redeveloped and all staff will be trained in the new

processes .The IT Division will replace the existing custom Helpdesk system, currently used to manage

incidents, service requests, development activities, and project initiation requests, in contrast to industry best

practices. The agency will explore a tool to be used solely for incident and service request management;

ideally, an off‐the‐shelf solution constructed around the ITIL Framework that will essential force the IT

Division to conform to best practices.

As recommended in the study, the IT Division will focus a number of initiatives on achieving better alignment

with DST business units. The division has been in the process of developing Service Level Agreements (SLA)

with each unit, and this work will continue into the 2Q 2015.The IT Division is working to create at least one

dedicated Business Relationship Manager role, an individual who will act as a single point of contact for the

relationship between IT and business operations. This individual will also be expected to standardize

communication with divisions and to incorporate performance measures and reporting into regular meetings

with agency division management.

In addition to improving alignment with business units, the IT Division will work with the Office of the State

Treasurer to develop departmental governance processes over technology and analytics initiatives. Formal

processes for project initiation, evaluation and prioritization, coupled with an effective departmental steering

committee, will remove some frustrations over changing priorities and a perceived lack of transparency into

the selection and prioritization of initiatives. The establishment of a departmental project management office

(PMO) will also help inform the governance process by monitoring and distributing resources across multiple

projects and defining the true capacity of the organization to execute multiple simultaneous projects. Lastly,

the IT Division will work with departmental management to secure more funding for IT operations and ensure

the allocation of IT costs are fairly distributed across the agency relative to utilization of IT services. The

implementation of asset management functions in Microsoft SCCM will also assist with cost modeling as IT

will have more accurate and timely information on equipment deployed across the agency.

The IT Division will also focus on an expansion of technology services. As recommended in the IT Operational

Study, the division will place a higher emphasis on technology innovation. The division has spent too much

time focused on maintenance activities and needs to partner with business users to envision and implement

novel technology solutions that will improve operational efficiency and/or citizen services. The IT Division will

be instituting an innovation program to develop and support new and interesting projects and guide the most

promising initiatives to full implementation. Innovation in the area of citizen and constituent self‐service is

the most important need for the agency. Due to an increased demand for department services, most

efficiency gains from technology will involve solutions that empower individuals to gain information or

initiate transactions without the need for staff intervention. Innovation in the area of mobile technology is

also important, to allow departmental services to be accessible from any device or platform, especially as the

computer is being supplanted by the phone and tablet as the primary consumer technology platform. The IT



118

Division will also need to enhance its abilities to support Bring‐your‐own‐Device (BYOD) programs, as staff

will also seek to interact with departmental IT systems using a variety of different technology platforms.

Departmental Analytics Program Upon the completion of the move of the Department of State Treasurer and some of the critical

recommendations of the IT Operational Study, the IT Division will turn its attention to departmental

analytics. Implementation of new governance structures, tools, personnel and processes are a necessary

precursor to these efforts. Without these structures in place, it will be impossible to prioritize analytics efforts

among all the other work that is requested of the IT Division, and there is no guarantee that any projects

selected will truly be beneficial without strong project justification methodologies in place.

There are a number of initiatives underway at the current time – IMD is working with the SAS Institute on a

project related to investment portfolio risk analytics, SHP has partnered with the GDAC for the construction

of a health claims data warehouse, and SLGFD, IMD, and RSD are all experimenting with ad‐hoc analytics to

various degrees. Conducting an analysis of the successes and failures of these initiatives will be an important

guide to all future endeavors. Due to the varied nature of the operational imperatives of the various DST

divisions, there is no single method, process, or toolkit that will have division‐wide applicability; however,

replicating areas of success with modifications and avoiding known problems will improve future

implementations. The strategic planning activities related to analytics that underway in SHP have been

valuable for that division and it is a model of planning and organization that the IT Division will seek to

replicate across the Department.

In order to truly achieve benefits from data analytics, it will not be enough to engage in traditional business

intelligence‐type activities of merely counting transactions or elements. Utilizing predicative analytics and

modeling to unlock patterns and business insights will allow management to make informed decisions about

resource allocation and utilizations. For instance, predicting the seasonal load of claims on escheated

property will allow for the effective utilization of temporary staff. Understanding the total retirement

portfolio of a State employee or teacher will allow RSD to develop and promote programs designed to help

ensure sufficient savings and income for retirement.

Unfortunately, DST is limited in the number of staff that can perform this type of analysis. Identifying

strategies for training additional staff, as well as augmenting existing staff with some specialized skillsets will

make this possible. Understanding the scope of these efforts and the finances involved will be critical to

allocating or requesting funds toward this effort. The importance of governance and project justification

cannot be understated as it pertains to this effort. Procuring high‐value professional services and training, as

well as funding new positions, can only be justified and secured for the most beneficial projects. An effective

governance body that prioritizes these efforts will make sure scarce departmental resources are not wasted.



119

Appendices

APPENDIX A – IT ORGANIZATIONAL CHART


120

Appendix A – IT Organizational Chart

Deputy TreasurerChief Information Officer

60009330

NetworkingAnalyst

60009370

Information Technology Manager60009360

Business & TechnologyApp. Specialist

60009356


60009333


60009350


60009335


60009341

North Carolina Department of the State TreasurerDivision of Information Technology Services

Updated 9/9/2014

Business & TechnologyApp. Analyst

60009351


60009346


60009368


60009367

Contractor


60009331


60009362


65004636


65004780


65004811


60009371


60009361


60009349


60009352

Business & Technology App. Analyst

60009051


60009334


60009332


60009358


60009357

NetworkingSpecialist60009343

Information TechnologyManager60009329

Technology SupportSpecialist60009353


Technical SupportTech

60009217

Technical SupportAnalyst

60009339

Technology SupportTech

60009344


60009348


60009359

ORBITIVR

HelpdeskCase Tracker

Core BankingPositive Pay

Bank InfoImageCheck 21

DynamicsSupply Inventory System

Internet/Intranet Sites SharePoint CoreiContact/List Serv

Investment SystemsUPP-IDMSUPS2000

UPP Audit SystemSoftware Deployment

RSD-IDMS

Database Admin/Mgmt and Development

RSD Data Warehouse SLGFD Audit SystemFin Data Reporting

Bond SystemIA – AutoAudit

TFS Admin

Information TechnologySecurity & Disaster

Recovery

Technology SupportAnalyst

60009355




60009340


60009337



60009347


60009345


60009364


65004635

Operations & Systems Specialist60009336




60009363

Level I Support

Provide consultation, support and or t raining to clients. Provide basic support of hardware, applicat ions, operat ing systems and networking for desktop systems. Individuals are not involved in applicat ion development, system integrations or network analysis. Refer complex technical problems to higher level support.

Level I I Support Analytical work providing consultation and support or training to the Technology Support Technicians. Provide advanced hardware, applicat ions, operat ing systems support for desktop issues and basic support of hardware, applicat ions, operat ing systems and networking for server systems.. Individuals are not involved in applicat ion development, system integrations, design or network analysis. Refer complex technical problems to higher level support.

Level I II Support

Advanced technical work providing consultat ion and support or training to the Technology Support Analysts. Provide advanced hardware, applicat ions, operat ing systems and networking support for desktop and server areas. Responsible for design, implementat ion and oversight of programs or projects.


60088045


65018425

Contractor

28 19 3

Contractor

Contractor

Contractor

APPENDIX B – SYSTEM TO BUSINESS PROCESS MAPPING


121

Appendix B – System to Business Process Mapping



CASE TRACKER(In-house Developed)

Track OST Constituent Calls and Casework

NCTREASURER.COM


maintained)

WEBTRENDS ON DEMAND(Hosted)

Provide usage metrics for Treasurer’s Website, DST Intranet, and ORBIT Self-

Service

iCONTACT(Hosted)

Mass electronic mailing services for Department of State

Treasurer

COMPASS INTRANET


maintained)

Public Interface to Retirement Systems, Unclaimed Property,

Banking, State and Local Government, Investments, Job Seekers, and other

OST initiatives

DST Employee interface to HR Forms, News, Job Seekers and

other Department related information


AUTOAUDIT(Purchased)

Maintain artifacts and records of

the Internal Audit section

CISIONPOINT(Purchased)

Database of print, online, broadcast and social media mentions of the

Department of the State Treasurer

CLEARPOINT(Hosted)

Strategic Plan and Operating Model

Management Tool for Department of State

Treasurer

SALESFORCE.COM(Hosted)

State Treasurer Event and Contact Management



122



DYNAMICS(Purchased)

CORE BANKINGFlexcube UBS(Purchased)

EXTERNAL BANKING Flexcube DB(Purchased)

CHECK 21 (Purchased)

BANK IMAGING(Purchased)

BUSINESS OBJECTS

(Purchased)

Provide DDA and Savings commercial

type Banking functions for agencies

Determine daily availability of funds for

investment

Generate daily tax payment reporting and process tax transfers to Dept of Revenue (DOR)

Upfront consolidation of agency disburing

accounts with positive pay and stop pay

Interface with the FRB for clearinghouse

activities such as pay decisions

Provide banking functions for state agencies including

account statements and check images

Provide limited GL functionality for Accounting and

Banking Operations

Reconcile and balance with data from the NC

Cash Management Control System

Reconcile Depository accounts, Cash Concentration

accounts, Community Bank accounts, the

Federal Reserve account, and

Miscellaneous bank accounts used to hold

funds (external)

Payroll and Sales tax transfers and reporting for agencies to Dept of

Revenue (DOR)

Collect agency interface and pay

information

Agency Funds Transfer functions

On-line banking functions for agency banking customers

Long term research and archive for Federal Reserve

Bank (FRB) financial transactions

Receive and process check files

Generate return image files to the

FRB

Low cost, short term image archive

alternative to FRB image option for pay

decisions.

Check Image archival and retrieval for

NCDST operations via FCC

Check Image retrieval for

agencies via FC@

Long term archive of monthly statements

Provide all reporting functionality for FCC

and FC@.

Generate agency notices such as

overdraft and interest statements

Through custom reports provide error correct and backout procedures for the

larger interfaces

Provide interface functions between FCC and Orbit for

Retirement

Provide monthly account balancing

and reconciliation for Retirement.

Miscellaneous check creation and positive

pay generation for Retirement


LIBERTYNET(Purchased)

Route manage Requests to Contract

Maintain electronic copies of contracts,

addenda, side letters, and other contracting

documentation.

Provide reports on contract expiration,

deliverable status, and other contract-related

processes



123



PORTIA SYSTEM(Purchased)

Validate Custodian Statement against

Internal Trade Records for Fixed

Income

Record Cash Transactions for

Investment Funds

Reconcile Pricing for MBS

BLOOMBERG RESEARCH and

AIM(Purchased)

Manage Fixed Income Transactions

CMS BOND EDGE SYSTEM

(Purchased)

Perform Fixed Income Portfolio

Analytics

PRIVATE I(Hosted by Burgiss

Group)

FUNDCENTRAL(Hosted)


Conduct Investment Research

Perform Real Estate and

Private Equity Fund Analysis


Perform Private Equity and Real Estate Analysis


PRIVATE INFORMANT(Hosted)

Perform Real Estate Investment

Analysis and Performance

Reporting

BNY MELLON WORKBENCH

(Hosted)

Manage Custodian Account

PortfolioPerformance

Reporting

Transaction Reconciliation

TRADEWEB(Hosted)


Income

MarketAxess(Hosted)


Income

Matlab(Purchased)

SAS Risk Analytics(Hosted)

Credit and Inflation Analytics

Total Portfolio Risk Analytics and Modeling



124



ORBIT(Purchased)

Custom application

DOCUMENT MANAGEMENT

(Purchased)

Imaging – all incoming correspondence items

get saved to each member’s account as

images

Workflow – Imaged documents generate workflows that route those documents to

the various processes to be worked.

MAPPING SUITE

(Purchased)

SILENT PRINT(Purchased)

SMART MOVER /MELISSA DATA

(Purchased)

Print checks, EFT stubs, letters and correspondence

Validate mailing addresses in ORBIT

Generate PDF forms developed with

Adobe Designer.

Adobe Forms (Purchased)

Microsoft BizTalk(Purchased)

Orchestrate interface files to and from external entities

including employer reporting monthly

contribution files from the 1200+ employers

ORBIT SELF SERVICE

(Purchased)Custom application

Accounting – Maintain EFT bank account, tax

withholding overpayment collection, integration into

Dynamics, etc.

Member Profile – all major information about a member presented on one screen plus create request and journal

updates to document interactions with

members

Correspondence – All Letters, Adobe PDF

application forms, cover sheets, etc. produced daily

via batch process.

Employer Reporting – collect monthly member contributions from 1200+

employer entities

Payroll – monthly for retirees / benefit recipients and

supplemental payrolls for refunds /rollovers /

DIP ER Reimbursements, etc.

Reports – Any and all reports used throughout the

system (metric reports, work queues, status

reports, processing results)

COLA / Post Interest /Annual Statements / 1099/W-2 – major annual batch

processes

Refunds - refund contributions and any

accrued interest to members no longer an

employee

Retirement – calculate member’s benefits, record their

option and setup benefit account

Estimates - member’s potential retirement benefits

depending on scenarios they

request.

Service Purchase - produce a cost for

member to purchase service in system. Record receipt of funds and post

service to member’s account.

Fire and Rescue – a retirement plan that has the

same basic functions of other plans (retirements,

refunds, service purchase, etc.) but so different in rules

that essentially creates separate screens to

accommodate.

Service Audit – audit members account for service corrections

Annual Statements / 1099 / W-2 – get

copies of these online

Estimator – What If scenarios to estimate

retirement benefits

Beneficiary Designation –

Choose death benefit and Return of contributions

designee

Update Personal Info – EFT

information, email, phone number, home address (retiree only)

Employer – all employer contribution

reporting functions plus reports and some

functions to help service their employees

Health Insurance Enrollment – (In

Progress) – add, edit, or cancel health

insurance coverage


Disability – DIPNC & DRET – tracks all

applications and does benefit calcs.



125


STATE & LOCAL GOVERNMENT FINANCE DIVISION

MUNI-EASE BOND MANAGER

(Purchased)

CCH WorkPaper Manager

(Purchased)

Audit Report Review

EXCEL SPREADSHEETS

WITH SQL SVR DB(In-house

Developed)

Audit Contract Review/Approval

203 Cash and Investments

Review

NCTreasurer.com(In-house

Developed)

Publish Bond Ledger

Publish AFIR information

“White Letter” generation for

corrections to audit

AFIR Collection and Processing

Statistical Report Generation

Unit Letter Generation for

warning regarding fiscal condition

Debt Applications

Debt Schedule Tracking/Bond

Ledger

Publish Statistical Reports

Tracking of Authorized Debt

Generate Annual Debt Service Requirements

Report

Generate Monthly Debt Notices

Arbitrage Compliance Monitoring

Verify Bond Sale Bid Calculations

TVALUE(Purchased)

Perform Time/Value Calculations

on Debt

PARITY(Hosted by Ipreo)

Manage Bids for Bond Sale


Financial Dashboard(In-House

Developed)

Public Access to County and

Municipal Fiscal Condition Ratios

LeapFile(Hosted)

Secure File Transfer for Large Audit Files

and Data



126



UPS2000(Purchased)

SYMPOSIUM(Hosted by ITS)


Research

DOCUMENT MANAGEMENT

(Purchased)

ONLINE PROPERTY

SEARCH(Developed In-

House)

CCH WORKPAPER MANAGER(Purchased)

Claim Processing

NCAS(Hosted by NCOSC)


Funds

Claim Payment


Tracking

Claim Processing


Funds


Tracking


Research


ResearchAuditingClaim Payment


WORKFLOW(Developed In-

House)

Claim Processing


Funds


Tracking

Management of Escheats Securities



127


STATE HEALTH PLAN DIVISION

SAS w/ENTERPRISE GUIDE

(Hosted by GDAC)

Extract-Transform-Load claim records for medical services from BCBSNC and pharmacy services

from ExpressScripts

TRUVEN HEALTH ANALYTICS

(Hosted by Truven)

Group data into Medical Episodes


Provide benchmarking on Plan financial and health outcome

performance relative to similar plans.

Provide reports on contract expiration, deliverable status,

and other contract-related processes

Provide a framework for reporting utilization and

other key measures of the health care service

contracts

Provide a toolkit for the actuarial valuation of the

Health Plan Fund by contracted actuarial

consultants.

EMC DOCUMENTUM(Hosted by ITS)

Storage of reports produced by BCBSNC and other

vendors.

APPENDIX C – BUSINESS APPLICATION AND INFRASTRUCTURE INVENTORY AND ROADMAP


128

Appendix C – Business Application and Infrastructure Inventory and Roadmap

2014 2015 2016 2017 2018Office of the State Treasurer

NCTreasurer.com/COMPASS - SharePoint Maintain Maintain Enhance Maintain MaintainClearPoint Maintain Maintain Maintain Maintain MaintainCaseTracker Maintain ReplaceSalesForce.com Maintain Maintain Maintain Maintain MaintainWebTrends OnDemand Maintain Maintain Enhance Maintain MaintainiContact Maintain Maintain Maintain Maintain MaintainAutoAudit Maintain Maintain Maintain Maintain MaintainCision Maintain Maintain Maintain Maintain Maintain

Retirement Systems DivisionORBIT (Online Retirement Benefits through Integrated Technology) Enhance Enhance Enhance Enhance Enhance

MelissaData Smart Mover Maintain Maintain Maintain Maintain MaintainMicrosoft BizTalk Maintain Maintain Maintain Maintain MaintainAdobe Forms Maintain Maintain Maintain ReplaceSQL Server Reporting Services Maintain Maintain Maintain Maintain MaintainMapping Suite Maintain ReplaceSilentPrint Maintain Replace

RSD-IDMS - Retirement Integrated Document Management System Enhance Enhance Enhance Maintain MaintainRetirement Data Warehouse Maintain Maintain Maintain Maintain MaintainSymposium - Call Center Maintain ReplacePaper Tiger Maintain Maintain Maintain Maintain MaintainInteractive Voice Response Maintain Replace

Unclaimed Property DivisionUPS 2000 - Unclaimed Property Management System Maintain Maintain ReplaceNCCash.com - Unclaimed Property Search ReplaceXerox Fast-Track Claim Processing Maintain Maintain Maintain MaintainUPP-IDMS - Unclaimed Property Integrated Document Management System Maintain Enhance Maintain Maintain MaintainCCH Workpaper Manager - Unclaimed Property Audit Maintain Maintain Maintain Maintain MaintainSymposium - Call Center Maintain ReplaceMelissaData Smart Mover Maintain Maintain Maintain Maintain Maintain

State Health Plan DivisionSAS - Healthcare Analytics Enhance Enhance Enhance Maintain MaintainTruven Health Analytics Maintain Maintain Maintain Maintain MaintainEMC Documentum Maintain Replace

Department of State Treasurer - Application Roadmap

Critical SystemsSignificant Enterprise Systems

Ancillary/Systems Software

Vendor-Managed Software



129

2014 2015 2016 2017 2018

State and Local Government Finance DivisionCCH WorkPaper Manager - Audit Management Maintain Maintain Maintain Maintain MaintainBond System Maintain ReplaceFinancial Condition Reporting Dashboard Maintain Maintain Maintain Maintain MaintainAFIR - Annual Financial Information Reports Maintain Maintain Maintain Maintain MaintainLeapFile Maintain Maintain Maintain Maintain MaintainParity Maintain Maintain Maintain Maintain MaintainMun-Ease Bond Manager Maintain Maintain Maintain Maintain MaintainTvalue Maintain Maintain Maintain Maintain Maintain

Investments Management DivisionBloomberg AIM Maintain Maintain Maintain Maintain MaintainBloomberg Research Maintain Maintain Maintain Maintain MaintainCMS BondEdge Maintain Maintain Maintain Maintain MaintainPrivate i Maintain Maintain Maintain Maintain MaintainPORTIA Maintain Maintain Maintain Maintain MaintainPrivate Informant Maintain Maintain Maintain Maintain MaintainBNY Mellon Workbench Maintain Maintain Maintain Maintain MaintainMarketAxess Maintain Maintain Maintain Maintain MaintainTradeWeb Maintain Maintain Maintain Maintain MaintainSAS Portfolio Risk Analytics Enhance Enhance Maintain Maintain MaintainMatlab Enhance Enhance Maintain Maintain MaintainBackstop CRM Enhance Maintain Maintain Maintain Maintain

Information Technology DivisionHelpdesk Enhance Maintain Maintain Maintain MaintainMicrosoft Team Foundation Server Enhance Maintain Maintain Maintain MaintainMicrosoft Project Server Enhance Maintain Maintain Maintain MaintainSQL Server Reporting Services Maintain Enhance Maintain Maintain Maintain

Financial Operations DivisionCore Banking - FlexCube FCC Enhance Enhance Maintain Maintain Maintain

Business Objects XI Maintain ReplaceExternal Banking - FlexCube @ Enhance Enhance Maintain Maintain MaintainCheck 21 Maintain Enhance Maintain Maintain MaintainBank Inaging - Unisys InfoImage Maintain Enhance Maintain Maintain MaintainLibertyNET Contract Management System Maintain Maintain Replace

Department of State Treasurer - Application Roadmap

Critical SystemsSignificant Enterprise Systems

Ancillary/Systems Software

Vendor-Managed Software



130

2014 2015 2016 2017 2018Hardware and Devices

Core Network Switch Maintain Enhance Maintain Maintain MaintainStorage Area Network Switches Maintain Enhance Maintain Maintain MaintainEMC SAN - Raleigh Maintain Enhance Maintain Maintain MaintainEMC SAN - WDC Maintain Maintain MaintainDesktops/Laptops (SHP, OST, SLG, UPD) Maintain Maintain Enhance Maintain MaintainDesktops/Laptops (RSD) Maintain Maintain Maintain Enhance MaintainDesktops/Laptops (FOD, IMD) Maintain Maintain Maintain Maintain EnhanceVirtual Hosts - Infrastructure Cluster* Maintain Enhance Maintain Maintain MaintainVirtual Hosts - Application Cluster ** Maintain Enhance Maintain Maintain MaintainVirtual Hosts - WDC*** Enhance Enhance Maintain Maintain MaintainVirtual Host - DMZ**** Maintain Enhance Maintain Maintain MaintainDDR Maintain Maintain Maintain Maintain ReplaceADIC Maintain Maintain Enhance Maintain MaintainRecovery Point Maintain Maintain MaintainCentera Maintain Maintain Maintain Replace

Infrastructure SoftwareMicrosoft Exchange Enhance Maintain Maintain Maintain MaintainMicrosoft SCCM Enhance Enhance Maintain Maintain MaintainVMWare Maintain Maintain Enhance Maintain MaintainMicrosoft Office Suite Maintain Maintain Enhance Enhance MaintainEnterprise Vault Maintain Maintain Enhance Maintain MaintainActive Directory Maintain Maintain Maintain Maintain MaintainZixGateway Enhance Maintain Maintain Maintain MaintainLumension Enhance Maintain Maintain Enhance MaintainStorage Manager Enhance Enhance Enhance Enhance EnhanceServ-U Enhance Maintain Maintain Enhance MaintainWhat's Up Gold Enhance Enhance Enhance Enhance EnhanceCommvault Enhance Maintain Maintain Maintain EnhanceKiwi CatTool Enhance Maintain Enhance Maintain EnhanceDameware Maintain Maintain Enhance Maintain MaintainGFI Faxmaker Enhance Maintain Maintain Maintain MaintainWireshark Maintain Maintain Maintain Maintain MaintainSecurance Maintain Maintain Maintain Maintain MaintainHP SIM Maintain Maintain Maintain Maintain MaintainSite Recovery Manager Maintain Maintain

* 5 Blade Servers** 9 Blade Servers*** 3 Blade Servers**** 4 Blade Servers

Department of State Treasurer - Infrastructure Roadmap

Vendor-Managed Software: The relationship with the software vendor is typically monitored outside of IT, typically due to the highly specialized nature of the application.

Ancillary System/Software: Enterprise systems or software managed by the IT department to support business objectives.

Significant Enterprise Systems: IT-Managed Software with a large operational cost and important to normal business operations.

Critical Systems: Significant IT-Managed Systems that must be recovered in the event of a disaster due to their criticality to business operations and impact on citizens and/or other governmental entities.

APPENDIX D – INITIATIVES BY DIVISION WITH APPROXIMATE COSTS AND ANTICIPATED COMPLETION DATE


131

Appendix D – Initiatives by Division with Approximate Costs and Anticipated Completion Date Office of the State Treasurer

Workflow and Online Forms for Web Infrastructure

Tool Evaluation and Selection < $250,000 4Q 2015

Implementation of Online Processes Internal 4Q 2016

Tools for Governance Management < $250,000 4Q 2016

Digital Imaging and Document Warehousing

Setup of Consolidated Scanning Center < $250,000 2Q 2016

Retirement Systems Division

Modifications to ORBIT for Firefighters' and Rescue Squad Workers' Pension Fund

$500,000 ‐ $1 Million 2Q 2016

Compliance Initiatives

2014 General Assembly Changes (Vesting, Spiking) Internal 4Q 2014

Qualified Excess Benefits Administration < $250,000 2Q 2015

Required Minimum Distribution < $250,000 3Q 2015

Replacement of Aging Technology Systems

RSD‐IDMS Workflow Upgrade < $250,000 3Q 2015

Call Center/ Interactive Voice Response $500,000 ‐ $1 Million 3Q 2015

Unclaimed Property and Escheats Division

Claims Fast‐Tracking Implementation < $250,000 4Q 2014

Property Owner Data Matching Internal 1Q 2014 (repeated each year in 1Q)

Business Process Automation Modifications Internal 3Q 2015

New Unclaimed Property Management System

Evaluation of Products Internal 4Q 2015

Procurement and Implementation $500,000 ‐ $1 Million 4Q 2016



132

State and Local Government Finance Division

Replacement for Debt Management System

Evaluation and Procurement Internal 1Q 2015

Implementation < $250,000 4Q 2015

Administrative Management System

Analysis Phase Internal 2Q 2015


Procurement and Implementation $500,000 ‐ $1 Million 2Q 2016

Website Redesign and Other Communications Initiatives Internal 2Q 2016

Investment Management Division

Enhance Reporting of Investment Performance and Issue Financial Statements



Procurement and Implementation Unknown 2Q 2016

Leverage Third‐Party Automation Tools for Manual Processes



Procurement and Implementation Unknown 4Q 2016

Internal Management of Publicly Traded Investments – Global Equity Index Positions

Unknown 2Q 2017

State Health Plan Division

Extranet Portal for Collaboration with External Vendors Internal 4Q 2015

New Report Management Portal Internal 2Q 2016

Execute Data and Analytics Strategy

Develop Strategic Plan < $250,000 1Q 2015

Implement Plan Recommendations Unknown 4Q 2016



133

Financial Operations Division

Complete Core Banking Upgrade and Implement Cash Management Functionality

Core Banking Upgrade > $1 Million 2Q 2015

CMCS Implementation > $1 Million 1Q 2016

Bank Imaging Upgrade < $250,000 4Q 2015

Agency‐Wide Procurement Management System < $250,000 2Q 2016

Accounts Payable Management System for Investment Portfolios < $250,000 3Q 2016

Information Technology Division

Building Move and Office Consolidation

Vacate the Albemarle Data Center $500,000 ‐ $1 Million 3Q 2015

Setup VM Environment for Core Banking DR < $250,000 3Q 2015

Implement SAN Replication at WDC < $250,000 4Q 2016


Deploy SCCM for Asset Management Internal 3Q 2014

Develop Strategic Plan for IT Internal 3Q 2014

Setup IT Innovation Hub Internal 4Q 2014

Implement SLAs between IT and other divisions Internal 2Q 2015

Setup IT Governance Policies and Programs Internal 2Q 2015

Establish Agency BRM and PMO Roles < $250,000 3Q 2015

Review and Implement a New Helpdesk System < $250,000 1Q 2016

Alternate Methods of System Delivery

Evaluate Dynamics GP Online Unknown 4Q 2015

Evaluate Off‐Premise SharePoint Unknown 4Q 2015

Evaluate Office365 Unknown 2Q 2016

Departmental Analytics Program

Division Analytics Planning Internal 4Q 2015

APPENDIX E – TIMELINE OF INITIATIVES


134

Appendix E – Timeline of Initiatives 2015

1Q 2Q 3Q 4Q Office of the State Treasurer Workflow and Online Forms for Web Infrastructure

Tool Evaluation and Selection

Retirement Systems Division ORBIT Modification for Fire and Rescue Pension Fund

Compliance Initiatives

Complete Qualified Excess Benefits

Required Minimum Distribution

Replacement of Aging Technology Systems

RSD‐IDMS Workflow Upgrade

Call Center/Interactive Voice Response

Unclaimed Property and Escheats Division Property Owner Data Matching

Business Process Automation Modifications

New Unclaimed Property Management System

Evaluation of Products

State and Local Government Finance Division Replacement for Debt Management System

Evaluation and Procurement

Implementation


Analysis Phase


Website Redesign and Other Communications Initiatives

Investment Management Division Enhanced Performance Reporting & Financial Statements

Analysis Phase


Automation of Manual Processes

Analysis Phase


State Health Plan Division Extranet Portal for Collaboration with Vendors

New Report Management Portal


Develop Strategic Plan

Implement Plan Recommendations

Financial Operations Division Core Banking Upgrade with Cash Management Functionality


CMCS Implementation

Bank Imaging Upgrade

Agency‐Wide Procurement Management System

Information Technology Division Building Move and Office Consolidation

Vacate the Albemarle Data Center

Setup VM Environment for Core Banking DR

Implement SAN Replication at WDC


Implement SLAs between IT and other divisions

Setup IT Governance Policies and Programs



135

Establish Agency BRM and PMO Roles

Review and Implement a New Helpdesk System

Alternate Methods of Delivery

Evaluate Dynamics GP Online

Evaluate Off‐Premise SharePoint

Evaluate Office 365


Divisional Analytics Planning



136

2016

1Q 2Q 3Q 4Q Office of the State Treasurer Workflow and Online Forms for Web Infrastructure

Implementation of Online Processes

Retirement Systems Division ORBIT Modification for Fire and Rescue Pension Fund

Unclaimed Property and Escheats Division New Unclaimed Property Management System

Procurement and Implementation

State and Local Government Finance Division Administrative Management System



Investment Management Division Enhanced Performance Reporting & Financial Statements


Automation of Manual Processes


Internal Management of Global Equity Index Positions

State Health Plan Division New Report Management Portal


Implement Plan Recommendations

Financial Operations Division Agency‐Wide Procurement Management System

Accounts Payable Mgmt. System for Investment Portfolios

Information Technology Division Building Move and Office Consolidation

Implement SAN Replication at WDC

Alternate Methods of Delivery

Evaluate Office 365


Implement Strategy

APPENDIX F – STRATEGIC INITIATIVES BY DIVISION


137

Appendix F – Strategic Initiatives by Division

Office of the State Treasurer – 2015‐2017 Strategic Information Technology InitiativesGove

rnan

ce M

anag

emen

tWorkflow and

Online Form

s

Digital Imaging

and Docu

ment

Warehou

sing


Evaluate Workflow and Form Tools for

SharePoint

Identify and Rank Processes for Conversion

Begin SLA Operational Data

Collection

Setup Consolidated Imaging Center in

New Facility

Procure eDiscovery Tool(s)

Implement eDiscovery Tool(s)

Procure and Deploy Tools

Convert T & B Expenses Process to

Online Digital

Conduct Additional Conversions for

Existing Processes

Review SLA Data Management Tool Requirements

Review Governance Board Tool

Requirements

Establish IT and Data Analytics Governance Processes

Implement Tool or Expand Use of ClearPoint



138

Financial Operations Division – 2015‐2017 Strategic Information Technology InitiativesBank Im

aging

Upgrade


Departmental

Contract

Man

agement Tool

Inve

stment

Portfolio Accounts

Payab

leJan 2016‐Jun‐2016Jun 2014‐ Dec 2014 Jan 2015‐Jun 2015 Jul 2015 ‐ Dec 2015

Customization of FlexCube,

Installation & User Training

Formal User Acceptance Testing

Agency Training on FlexCube DB


Data

Definition of OSC Requirements for Cash Management

Customization of FLEXCUBE Cash Management

Module

User Training and Formal Testing of Cash Management

Agency Training on CMCS Module


Data

Conduct Bank Imaging Upgrade

Define System Requirements

Draft and Release RFP

Evaluate Proposals and Select Vendor

Implement SystemConduct Data Migration

User TrainingComplete

Implementation

Define System Requirements & Conduct Gap

Analysis



139

Investment Management Division – 2015‐2017 Strategic Information Technology InitiativesProce

ss

Auto

mation

Reporting an

d Financial

Statemen

ts

Global Equ

ity

Trading

Platform


Identify Tools for Financial

Statements



Identify Tools for Detailed Reporting



Improve and Enhance Processes

and Tools



Identify Tools for Process Automation


Identify Tools for Global Equity

Trading




140

Retirement Systems Division – 2015‐2017 Strategic Information Technology Initiatives

Complia

nce In

itiative

sFire an

d Rescu

e Pens

ion Mod

ifications

Legac

y System Rep

lace

men

tJan 2016‐June 2016Jun 2014‐Dec 2014 Jan 2015 – Jun 2015 Jul 2015 ‐Dec 2015

Complete QEBA Payroll

Implementation

Test and Deploy Self Service Modifications

Upgrade RSD‐IDMS Test Workflow Environment

Conduct Design of Benefit Processing

Modules

Define Requirements for Benefit Processing

Design and Develop Self‐Service Modifications

Plan for Data Migration

Develop Benefit Processing Modifications and Data MigrationWith Incremental Delivery

Re‐Develop Business Processes in New Workflow Environment

Develop Legislative Modifications

Research Potential Call Center Replacement

Options

Develop and Test In‐Process Data

Migration/Archive Legacy Data

Test and Deploy New Workflow Processes

Design RMD Modifications

Develop, Test and Deploy RMD Modifications

Implement New Call Center Solution

Implement New IVR System

Design Workflow Enhancements and ORBIT Integration

Develop Workflow Enhancements



141

State Health Plan Division – 2015‐2017 Strategic Information Technology Initiatives

Extrane

t Portal

Exe

cute Data

Analytics

Strategy

Rep

ort

Man

agem

ent

Portal


Conclude Operational Assessment

Conduct Strategy Review and Analyze

Findings

Implement Long‐Term Activities Defined in Plan

Review NCID Integration with FlexCube for

Lessons Learned

Develop Integration with NCID for Extranet Portal

Collect Requirements for Report Portal

Develop Structure for New Report

Portal

Develop Automation for Report Filing

Pilot for New Reports

Pilot with Subset of Vendors and External

Stakeholders

Migrate Existing Report Repository

Data

Full Implementation of Extranet Portal

Develop Action Plan Based on Strategic

Review

Implement Short‐Term Activities Defined in Plan



142

State and Local Government Finance Division – 2015‐2017 Strategic Information Technology Initiatives

Website Enhance

ments and

Other Communication

Initiatives

Debt Management

System

Contact M

anagem

ent System

Jan 2016‐Dec 2016Jun 2014‐ Dec 2014 Jan 2015‐Jun 2015 Jul 2015‐ Dec 2015

Develop RFP for Debt Management

System




Perform Historical Data Migration

Complete System Implementation

Develop Requirements for

Contact Management

Conduct Market Survey of CRM

Products

Evaluate all DST CRM Needs

Develop RFP for Contact

Management System




Review Website Content with

Communications Section

Purge Extraneous Website Content

Restructure the Presentation of Key

InformationOther

Communication Initiatives as Defined



143

Unclaimed Property and Escheats Division – 2015‐2017 Strategic Information Technology InitiativesBusiness Process

Auto

mation

Enhanc

emen

ts

Claim Fast Track

Implementation

Data M

atching

Eva

luation of New

Unclaim

ed Property

Management System

Claim

Proce

ssing

Analytics


Develop and Test New Fast‐Track

Portal

Activate Portal and Missing Money Data

Exchange

Evaluate Fast‐Track Volume and Performance

Modify Portal; Activate InstantID

Validation

Interview other states about

alternative systems

Conduct Procurement Activities

Evaluate GDAC for Data Matching Capabilties

Perform Annual Data Matching

Address “Quick Hit” Deficiencies

Review Processes for gaps and

measurement needs

Comprehensive Redevelopment

Effort (if necessary)

Evaluate Measurement

Needs

Source Performance Data

Develop Reports, KPI, Dashboards,

etc..

Demonstrations of systems in the marketspace

Draft Requirements and Specifications for a Replacement

System

APPENDIX G – REPORT TO THE STATE CIO


144

Appendix G – Report to the State Chief Information Officer

Department of State Treasurer

Information Technology Plan

For 2014‐2016 Biennium

By

William V. Golden, Dept. of State Treasurer

Prepared: October 1, 2014



145

1 Introduction

1.1 Purpose

The purpose of this document is to provide agency data for the Information Technology Plan for the 2014-2016 Biennium to the North Carolina State Chief Information Officer (SCIO) as required by G.S. 147-33.72B. The statute mandates that each agency submit a technology plan to the SCIO by October 1 of each even-numbered year. The State Information Technology Plan (Plan) is required to cover a five-year time period. To properly inform the Plan, agency plans are also required to cover a five-year time period.

1.2 Roadmap

Goal Objective Initiative Description Funding

Mechanism

1. Provide Public

Leadership in Finance,

Fiscal, and Health Policy

Objective 1.2

Maximize Risk Adjusted

Return of the Investment

Portfolio

1.2.5 Complete

comprehensive

update of

investment policies

Implement AP

System for

Investment

Accounting (FOD)

Enhance Reporting of

Investment

Performance and

Issue Financial

Statements (IMD)

Internal Management

of Publicly Traded

Investments – Global

Equity Index

Positions (IMD)

Leverage Third‐Party

Automation Tools for

Manual Processes

(IMD)

Expansion

Budget

Request or

Receipts

2. Enhance

Accountability of

Department Services

Objective 2.1

Promote and improve

transparency and ethical

2.1.4 Develop,

analyze and

implement

Tools for Governance

Management (OST)

Expansion

Budget

Request or



146


Mechanism

processes departmental

policies and

standard operating

procedures

Receipts

Objective 2.2

Strengthen Board and

Committee Oversight

2.2.3 Provide

consistent meeting

formats,

presentation of

materials and

records across

Department for all

boards and

commissions

chaired by the

Treasurer

Digital Imaging and

Document

Warehousing (OST)

Expansion

Budget

Request or

Receipts

Objective 2.4

Effectively manage risk,

resources and compliance

2.4.6 Establish a

departmental

strategy for

procurement and

contract

management

Implementation of a

Department‐wide

contract and

procurement

management system.

(FOD)

Expansion

Budget

Request or

Receipts

3. Innovate and

Modernize Operations

Objective 3.1

Improve data analytics

and use of metrics in

decision‐making processes

3.1.1 Create

scorecards and

performance

measurement

standards for each

division and core

service area.

Business Process

Automation

Modifications (UPD)

Expansion

Budget

Request or

Receipts

3.1.2 Develop

departmental and

divisional policies

and processes for

data capture,

analytics and

sharing

Replacement of

Documentum with

New Report

Management Portal

(SHP)

Execute Data and

Analytics Strategy

(SHP)

Expansion

Budget

Request or

Receipts



147


Mechanism

Departmental

Analytics Program

(IT)

Objective 3.2

Strategically Implement

Technology‐Based

Applications

3.2.2 Enhance e‐

communications

abilities and

strategies to be

more responsive

and interactive with

members and

customers

Develop an Extranet

Portal for

Collaboration with

External Vendors

(SHP)

Website Redesign

and Other

Communications

Initiatives (SLGFD)

Expansion

Budget

Request or

Receipts

3.2.3 Assess cross‐

functionality and

best practices

across

departmental call

centers and

implement

necessary upgrades

Replace and/or

Upgrade Aging

Technology Systems

(RSD)

Expansion

Budget

Request or

Receipts

3.2.4 Complete

modernization of

SLGFD business

systems and

infrastructure

Debt Management

System Replacement

(SLGFD)

Administrative

Management System

(SLGFD)

Expansion

Budget

Request

(Funded in

2013)

3.2.5 Implement a

new Core Banking

System with cash

management

functionality

Complete upgrade of

existing FlexCube

system and

replacement of OSC’s

CMCS system. (FOD)

Upgrade to Bank

Expansion

Budget

Request

(Funded in

2012)



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Mechanism

Imaging System.

(FOD)

3.2.6 Increase

availability, quality,

and use of self‐

service

technologies

Complete

Implementation of

Claims Fast‐Tracking

Initiative (UPD)

Workflow and Online

Forms for Web

Infrastructure (OST)

Expansion

Budget

Request or

Receipts

Objective 3.3

Continuously Improve Core

Functions and Programs

3.3.8 Reassess the

organizational

structure of Legal,

IT and SLGFD

Implement the

Recommendations of

the IT Operational

Review (IT)

Expansion

Budget

Request or

Receipts

Modifications to

ORBIT for

Firefighters' and

Rescue Squad

Workers' Pension

Fund (RSD)

Complete

Compliance

Initiatives (RSD)

Continue Data

Matching Efforts

(UPD)

Evaluate Unclaimed

Property

Management

Systems (UPD)

Alternative Methods

of System Delivery

Expansion

Budget

Request or

Receipts



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Mechanism

(IT)

4. Maximize the Talent

of our People

Execute a Successful

Building Move and

Office Consolidation

(IT)

Expansion

Budget

Request or

Receipts



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2 Department of State Treasurer IT Plan

Executive Summary The last two years have been a period of great change for the Information Technology Division of the North Carolina Department of State Treasurer (NCDST). The State Health Plan of North Carolina was placed under the administration of the State Treasurer, necessitating a merger of IT systems and support for technologies not previously used by NCDST. Economic recovery created a surge in retirements and staff departures for private-sector employment, resulting in the turnover of over 25% of the IT Division’s personnel. Despite new responsibilities and new staff, the IT Division was able to address many critical technology needs and strategic goals of NCDST.

A complete overhaul of Death Benefits processing and payments for the North Carolina Retirement Systems was implemented in 2013.

Work began in 2014 on an upgrade of the State’s Core Banking platform, with new functionality to replace a cash management used by the Office of State Controller for over 20 years.

Significant progress was made in the replacement of IT systems used by the State and Local Government Finance Division with the implementation of new audit and financial reporting systems.

The IT Division successfully upgraded major components of NCDST’s network and storage infrastructure.

The next two years will again be a period of great change for NCDST and IT Division. Beginning in 2014, NCSDT will be moving from the Albemarle Building in Downtown Raleigh, the agency’s primary office for over 40 years. As part of this move, the IT Division must determine the future direction of departmental data center operations, currently housed in the Albemarle Building. In 2014, an operational study of the IT Division was performed, highlighting the need for changes in governance, project and resource management, and service delivery. The implementation of these recommendations will be a major effort of NCDST over the next two years. At the same time, the IT Division must continue work on key departmental initiatives, as well as expand the services offered by the department to constituents and citizens.



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IT Vision, Mission, and Strategies

3 Guidance

3.1 SCIO Guidance

IT Vision

Making government services more accessible and efficient for all consumers is the foundation of the One IT strategy.

IT Mission Promoting a stronger North Carolina that connects citizens, businesses, education, and government is the mission of IT.

IT Strategies Strategies focus organizations to achieve complicated goals or objectives. With an eye to the future while sustaining current foundational requirements, the SCIO has adopted the “ABC” strategy to fix and modernize IT.

Strategy Intended to:

A. Accelerate Consumer Focus

Embrace the consumerization of IT with a focus on the requirements of the consumer of technology

B. Balance Innovation and Risk

Try newer technologies while managing enterprise risk

C. Collaborate as One IT Work as a team to accomplish our mission

D. Deliver Effective Operations

Focus on achieving business outcomes through effective and efficient technology delivery



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In addition to the seven guiding principles outlined above, the SCIO’s Cabinet Unite IT Strategy focuses strongly on collaborative IT governance, big data and analytics (to include, but not limited to, work with GDAC and GIS), IT operations, and innovation.

The table below outlines the six IT business capabilities and five IT organizational capabilities highlighted in the Cabinet Unite IT Strategy.

Business Capabilities Organizational Capabilities

Digital Focus Collaborative IT Governance

Big Data and Analytics Strategic Planning and Architecture

Enterprise Resource Planning IT Program and Project Management

Application and Service Modernization Innovation

Risk Management and Security Talent Development and Management

IT Operations

Please consider these areas, along with the seven guiding principles and your agency-specific goals and objectives when creating agency IT goals and objectives.



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4 Department of State Treasurer Vision,

Mission, Values and Goals

4.1 Vision The vision of the North Carolina Department of State Treasurer is to create and maintain a

fiscally sound and economically prosperous North Carolina. The Department of State

Treasurer has broad state financial authority with which to achieve this vision.

4.2 Mission The mission of the North Carolina Department of State Treasurer is to exercise fiduciary

oversight and provide outstanding customer service that provides value to, and instills

confidence by, the State's citizens, customers, and financial community.

4.3 Values Customer Orientation

Keep the customer, the citizens of the State of North Carolina, at the center of our focus in all

that we do.

Diversity

Recognize and value the benefits of diverse ideas, perspectives, and people through human

resources practices, vendor selection, and operational procedures.

Expertise

Recruit and maintain the highest levels of expertise in all aspects related to the Department

of State Treasurer through hiring, contract services, retention, and training of resources. To

provide the optimal level of service to the citizens of North Carolina.

Integrity

Establish and maintain the highest level of integrity by installing and ensuring ethical

practices throughout the Department.

Long‐Term View

Maintain a big picture perspective and strategy, consistent with the goals and responsibilities

of the Department of State Treasurer.

Transparency

Structure and conduct all aspects of government regarding the Department of State

Treasurer with an open and transparent policy, promoting both trust and accountability.



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4.4 Agency Goals Provide Public Leadership in Finance, Fiscal, and Public Health

Enhance Accountability of Department Services

Innovate and Modernize Operations

Maximize the Talent of our People



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5 Department of State Treasurer IT

Vision, Mission, and Values

5.1 IT Vision The vision of the North Carolina Department of State Treasurer is to create and maintain a

fiscally sound and economically prosperous North Carolina.

5.2 IT Mission The Information Technology Division’s mission is to deliver comprehensive technology

solutions that allow the Department of State Treasurer to achieve a fiscally sound and

prosperous North Carolina.

5.3 IT Values Reliability

Maintain a stable and secure IT infrastructure to support business operations.

Innovation

Identify and capitalize on opportunities for enhancement to existing systems to reduce risk

and increase operational efficiencies.

Service Orientation

Expand technology services to support improvements in customer and citizen services.

Expertise

Develop and maintain the capacity of IT personnel to effectively deliver IT services in

accordance with industry standards for project management, operational service delivery,

software development, and information security.

Collaboration

Advise and execute the expansion of measurement and analysis of information to achieve

higher levels of operational effectiveness.



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6 Department of State Treasurer IT Goals,

Objectives and Initiatives

6.1 Provide Public Leadership in Finance, Fiscal, and Health Policy

6.1.1 Maximize Risk Adjusted Return of the Investment Portfolio

6.1.1.1 Complete comprehensive update of investment policies.

Enhance Reporting of Investment Performance and Issue Financial Statements

Under new legislative requirements, IMD will be issuing annual financial statements

related to the Retirement Systems investment programs. These financial statements will

be audited by a commercial, independent third‐party firm. In additional to this new

requirement, IMD will also be required to produce new reports regarding investment

performance. Among these reports, IMD will be required to produce and make public a

report detailing the fees and performance of all external fund managers utilized for

pension investments. This report must contain investment valuations, rates of return, and

management and incentive fees paid.

Although this information is available today, IMD, along with the Department’s Financial

Operations Division, will require new tools and technologies to maintain it in a

comprehensive, aggregated format for statement production, reporting, and auditing. The

new legislative requirements are in effect for the 2014‐2015 fiscal year and building the

technology capacity to meet these requirements is imperative. DST is investigating how

best to meet these requirements and DST IT will support all efforts to procure and

implement necessary tools. This work is expected to commence immediately, and

continue through the end of 2Q 2016, the end of the 2015‐2016 fiscal year.

Leverage Third‐Party Automation Tools for Manual Processes

Currently, IMD utilizes manual processes for a number of investment functions. Notably,

the execution of trade tickets, the recording of cash receipts, and the distribution of cash

holdings involve the physical routing of forms and documents. In addition to being

inefficient, these processes also create a large volume of physical records that must either

be retained in physical form or converted to digital format for preservation.

IMD is interested in utilizing third‐party tools to automate some of these processes. From

routing and electronic approvals, to digital archiving, tools for process management would

increase operational efficiency and reduce the burdens associated with archive

management and retrieval. As IMD expands their internal investment management to

include portions of the global equity portfolio, the importance of automation systems



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increases due to the expected growth in the volume of documents associated with current

processes.

IMD will partner with DST IT to evaluate and procure tools and technologies for process

automation. This work is expected to commence in 3Q 2015.

Internal Management of Publicly Traded Investments – Global Equity Index Positions

IMD is seeking to implement an electronic platform for global equity trading. By actively

managing a portion of the global equity portfolio in‐house, the division will be able to save

on management fees and the pension fund will be able to derive a greater benefit from

positive returns. The implementation of a trading platform will likely involve special

hardware and routing devices, much like the implementation of Bloomberg currently in‐

place for the fixed income asset management group. DST IT will partner with IMD in the

evaluation of platforms and implementation planning to achieve a secure and cost‐

effective solution to permit global equity trading.

Accounts Payable Management System for Investment Portfolios

DST IT will work with FOD to identify and select a tool to streamline the disbursement of

funds from investment portfolios to vendors. This system should include the ability to

track and report expenditures by portfolio, vendor, or other categories defined by FOD.

The system should also include a check production feature. Due to the commonality with

some of the functionality of Dynamics GP as used by FOD, Dynamics will also be

considered for this purpose. Work on this initiative is anticipated to begin in 3Q 2016, at

the conclusion of the Core Banking Upgrade, Bank Imaging Upgrade, and the

implementation of a new departmental contract management solution.



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6.2 Enhance Accountability of Department Services

6.2.1 Promote and improve transparency and ethical processes

6.2.1.1 Develop, analyze and implement departmental policies and standard

operating procedures

Tools for Governance Management

Initiatives to develop governance structures for information technology project and data

analytics projects are currently underway. At the same time, SLAs are being developed

and implemented across the entire department. While SLAs will be in place before the end

of the 2015 FY, new governance structures and processes will likely continue to be

developed through the end of 2015. As part of the development of the new governance

structures and processes, OST will require tools for project portfolio management,

including initiation, evaluation and monitoring, as well as a centralized repository for

operational metrics related to SLA performance. Beginning in 1Q 2016, DST IT will work

OST to identify appropriate tools that will be meet the needs of the new governance

structures. Procurement and implementation are expected to begin in late 2016 and

continue into the following year.

6.2.2 Strengthen Board and Committee Oversight

6.2.2.1 Provide consistent meeting formats, presentation of materials and

records across Department for all boards and commissions chaired by the Treasurer

Digital Imaging and Document Warehousing

In support of a migration away from paper‐based business processes and to enable more

use of digital technology by boards and commissions, OST and DST IT will partner to

develop a strategy regarding digital imaging and document warehousing. Currently, DST

IT supports a large and diverse portfolio of electronic document management tools. Some

of these systems can likely be consolidated, creating a small handful of platforms that will

reduce the IT support burden and make it easier for DST employees to work across the

technology portfolio. In 2015, the Department of State Treasurer will move to a new

facility, consolidating all eight divisions into a single office complex. Plans for the new

facility call for a centralized document imaging center to consolidate division‐specific

document scanning centers currently in two different buildings. Following the completion

of the move, DST IT will begin working with OST to leverage the consolidated scanning

center for departmental use, with a special emphasize on the digitization of documents

required for board and commission meetings. This work is expected to begin 2Q 2016.



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6.2.3 Effectively manage risk, resources and compliance

6.2.3.1 Establish a departmental strategy for procurement and contract

management

Replacement of LibertyNET with Agency‐Wide Procurement Management System

The DST IT division will work with FOD to identify and select an appropriate replacement

for the legacy LibertyNET system. The new solution must be sized to handle the content

load of procurement for the entire department, not just one division. At the same time,

the system must be configurable to support the new policies and procedures developed by

FOD for contract management. Lastly, a migration of existing data and artifacts from the

legacy LibertyNET system to a new solution must be achieved before the LibertyNET

system can be retired.

Although there have been discussions regarding the development of a Statewide contract

management system integrated with e‐Procurement, this system has not been made

available. While this would be an ideal solution, if it is not offered soon, DST will be forced

to act due to the tenuous condition of LibertyNET. Absent a Statewide system, beginning

in 2Q 2015, DST IT will work with FOD to develop an RFP for a competitive procurement of

a contract management solution. DST IT will be seeking a product that meets FOD’s

process requirements, but can also be integrated into the department’s existing

SharePoint environment or be delivered in a Software‐as‐a‐Service (SaaS) model. DST IT

is targeting completion of this initiative at the end of 2Q 2016.



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6.3 Innovate and Modernize Operations

6.3.1 Improve data analytics and use of metrics in decision‐making

processes

6.3.1.1 Create scorecards and performance measurement standards for each

division and core service area.

Business Process Automation Modifications

Gaps between UPD business processes and their automation systems are inhibiting

efficient divisional operations. At the same time, the current system may not be adequate

for the collection of claim processing metrics necessary for management oversight and

business decision making. At the conclusion of the Fast‐Track implementation, DST IT will

work with UPD to address deficiencies in the current workflow design. This work is

expected to begin in 1Q 2015 and conclude by 3Q 2015.

6.3.1.2 Develop departmental and divisional policies and processes for data

capture, analytics and sharing

Replacement of Documentum with New Report Management Portal

The manual effort involved in managing plan reports in the OITS Documentum

environment is both time‐consuming and conducive to error. Since the accurate storage

and distribution of vendor reports are critical to plan operations, SHP seeks to replace the

existing system as soon as possible.

This initiative will involve the development of a new report repository, likely leveraging the

existing DST SharePoint infrastructure. It will be necessary to redevelop the automated

routing, filing, and notification processes that previously existed in the Documentum

environment. It will also be necessary to provide for an automated migration of existing

reports from Documentum into the new report repository. Once these steps are

concluded, not only will SHP have a more robust framework for managing vendor reports,

but the agency also will realize cost‐savings by terminating the OITS Documentum

service.

Work on this initiative is expected to begin before the end of 2014, with completion near

the end of 2Q 2016.


The assessment of the SHP Data and Analytics program calls for a strategic review of the

program’s goals, initiatives and resources. This strategic analysis should determine a plan

for personnel resourcing, vendor relationship management relative to data sourcing,

integration and hosting, and application of data analytics for plan management and



161

decision support. SHP is planning for this strategic review, and it should be completed no

later than the end of 2Q 2015.

Until the review is complete, it is difficult to ascertain what specific initiatives will emerge

from the new data and analytics strategy. It is clear from the preliminary assessment that

there will be a role for DST IT in the implementation of the strategic recommendations. It

is also likely that this work will continue through the end of 2016 and beyond.


Upon the completion of the move of the Department of State Treasurer and some of the

critical recommendations of the IT Operational Study, the IT Division will turn its attention

to departmental analytics. Implementation of new governance structures, tools, personnel

and processes are a necessary precursor to these efforts. Without these structures in place,

it will be impossible to prioritize analytics efforts among all the other work that is

requested of the IT Division, and there is no guarantee that any projects selected will truly

be beneficial without strong project justification methodologies in place.

There are a number of initiatives underway at the current time – IMD is working with the

SAS Institute on a project related to investment portfolio risk analytics, SHP has partnered

with the GDAC for the construction of a health claims data warehouse, and SLGFD, IMD,

and RSD are all experimenting with ad‐hoc analytics to various degrees. Conducting an

analysis of the successes and failures of these initiatives will be an important guide to all

future endeavors. Due to the varied nature of the operational imperatives of the various

DST divisions, there is no single method, process, or toolkit that will have division‐wide

applicability; however, replicating areas of success with modifications and avoiding known

problems will improve future implementations. The strategic planning activities related to

analytics that underway in SHP have been valuable for that division and it is a model of

planning and organization that the IT Division will seek to replicate across the

Department.

In order to truly achieve benefits from data analytics, it will not be enough to engage in

traditional business intelligence‐type activities of merely counting transactions or

elements. Utilizing predicative analytics and modeling to unlock patterns and business

insights will allow management to make informed decisions about resource allocation and

utilizations. For instance, predicting the seasonal load of claims on escheated property will

allow for the effective utilization of temporary staff. Understanding the total retirement

portfolio of a State employee or teacher will allow RSD to develop and promote programs

designed to help ensure sufficient savings and income for retirement.

Unfortunately, DST is limited in the number of staff that can perform this type of analysis.

Identifying strategies for training additional staff, as well as augmenting existing staff with

some specialized skillsets will make this possible. Understanding the scope of these efforts

and the finances involved will be critical to allocating or requesting funds toward this

effort. The importance of governance and project justification cannot be understated as it

pertains to this effort. Procuring high‐value professional services and training, as well as

funding new positions, can only be justified and secured for the most beneficial projects.



162

An effective governance body that prioritizes these efforts will make sure scarce

departmental resources are not wasted.



163

6.3.2 Strategically Implement Technology‐Based Applications

6.3.2.1 Enhance e‐communications abilities and strategies to be more responsive

and interactive with members and customers


SLGFD has identified a need to enhance communication with constituent agencies and

individuals. The division will be working with the Communications Section of the Office of

State Treasurer to redevelop the presentation of information on the Department’s public

website, NCTreasurer.com. The aim of this initiative is to make information easier to find

through website navigation, promote the most relevant information on the website for

quick access, and cull superfluous information from the site. Most importantly, SLFGD

seeks to create on NCTreasurer.com, an online central repository of electronic copies of

accepted audit reports received for the 2014 Fiscal Year. Following the website redesign

effort and parallel with efforts to implement an electronic contact management system,

SLGFD will be reviewing other communication and outreach efforts and may call upon

DST IT resources for assistance. This work is expected to begin in 2Q 2015 and continue

for about one year.

Develop an Extranet Portal for Collaboration with External Vendors

Coordinating the efforts of multiple vendors for the delivery of health plan services is no

easy feat. In addition to the numerous vendors involved in enrollment, claim processing,

billing, and disease management, the SHP must also coordinate the activities of the

State’s largest employers to ensure seamless delivery of benefits to employees of the

State of North Carolina, the University of North Carolina System, and over 100 local

education units.

SHP requires a digital platform to facilitate this coordinated effort. The Department of

State Treasurer has implemented SharePoint as a web content management platform for

departmental Intranet and Internet websites. The agency has also made use of

SharePoint team sites as collaborative workspaces for internal project teams. In

conjunction with SHP, the DST IT will expand this capability to external users, via an

extranet portal.

Security is of paramount importance in this initiative, due to the status of SHP as a HIPAA

Covered Entity. Authentication of external users is one of the biggest challenges

associated with extending the digital platform beyond DST. Integration with NCID may

address this challenge, and this will be a design goal of the new initiative. Work on this

initiative is under way with completion expected by 4Q 2015.

6.3.2.2 Assess cross‐functionality and best practices across departmental call

centers and implement necessary upgrades

Replace and/or Upgrade Aging Technology Systems



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Starting in September of 2014, DST IT will work with external vendors to upgrade the

existing business process automation software used by RSD. As there is no direct upgrade

path for the version of workflow software currently used by RSD and the version being

implemented, this initiative will require significant development efforts. Over 25 business

processes are modeled in the current workflow system, and each of these must be

redeveloped for the new version of business process automation software. The software

is not only critical to managing process flows throughout RSD, it provides valuable insight

into measures of efficient and performance such as turnaround time and accuracy rate.

Continuity of both the process and process measurement functionality is key to success.

This project is expected to be completed in 3Q 2015.

Following the implementation of the new version of workflow, DST IT and RSD will work

to enhance the processes modeled within the system. Tight integration between ORBIT

and the workflow system has been a design goal since the implementation of ORBIT and

the new version of the software has the potential to make this possible. This effort will be

incremental, expected to begin in late 2015, but potentially running for several years as

ORBIT redevelopment efforts in key business processes are being considered upon

completion of efforts related to the Firefighters' and Rescue Squad Workers' Pension

Fund.

DST is exploring alternative office space, as the Albemarle Building has been designated

for a complete internal renovation. As a part of moving to a new office, DST IT and RSD

will be exploring possibilities for the replacement of the current call center infrastructure.

These efforts will address the aging IVR and Symposium tools currently used by RSD. It is

unclear whether or not DST will be able to leverage the State ITS telephone network at a

new office facility, and telephony limitations will be an important consideration in efforts

related to call center replacement. This work has started, and is expected to be

completed in 3Q 2015.

6.3.2.3 Complete modernization of SLGFD business systems and infrastructure

Debt Management System Replacement

DST IT has been working with SLGFD to capture the necessary requirements for a new

Debt Management system. A survey of the product market has also been conducted and

appropriate commercial products that meet many of the division’s needs have been

identified. Throughout the duration of 2014, an RFP will be prepared and released to

solicit proposals for a commercial system. While the primary requirements of a new

system are focused on replacing the data tracking functions of the current system, this

implementation represents an opportunity to improve and enhance several other

business processes surrounding debt approval, issuance, and monitoring. Many

commercial systems contain functionality for electronic document management and

storage. This functionality would be a significant improvement over current paper‐based

processes. Integration with other data providers, such as Pinnacle and Sterling, to allow

for monitoring of arbitrage compliance is also being sought in a new system. Selection of

a new system is expected to occur in 1Q 2015, with implementation to be completed by

the end of that year.



165


An electronic contact and administrative management system will provide centralized

management of key information, permitting a team‐based approach to communication

with local units and management of the audit review process. Improved tracking of the

audit review process will also provide management insight into operational efficiency.

SLGFD is currently conducting research into potential solutions; however, similar needs

for centralized contact management exist in several other divisions. In 2Q 2015, DST IT

will begin working with SLGFD and other divisions to determine the appropriate strategy

for contact management. This strategy must weigh the benefits of segmented

implementations of division‐specific contact management systems against efficiency and

cost benefits of standardization. DST IT and SLGFD will seek to begin procurement of a

solution in 3Q 2015, with implementation before the end of the 2Q 2016.

6.3.2.4 Implement a new Core Banking System with cash management

functionality

Complete Core Banking Upgrade and Implement Cash Management Functionality

In March of 2014, DST initiated an upgrade of the Core Banking system, scheduled for

completion in May of 2015. When complete, all functionality in the current version of Core

Banking will be ported to the latest version of FlexCube.

FOD has completed the development of functional specifications for the new Core

Banking system, and Oracle has started work to customize the FLEXCUBE software to

meet the specific needs of the State. Representatives from Oracle have worked with DST

IT staff to construct new environments to host the Core Banking system. These

environments make use of virtualization technology, as opposed to relying completely on

physical hardware, which will aid in disaster recovery and continuity of business

operations. The base FLEXCUBE installation in underway and the customizations to the

software are expected to be delivered to FOD in 3Q 2014. The remainder of the year will

focus on testing, data migration, and training for staff.

When the Core Banking System is successfully upgraded, the Oracle project team will

shift to the implementation of cash management functionality in FLEXCUBE to replace

the State’s CMCS application. Representatives of Oracle will work with the Office of the

State Controller (OSC) to finalize requirements for customization and configuration of

the FLEXCUBE Cash Management module. DST IT and FOD will ensure that changes

made to the environment do no negatively impact the operation of the Core Banking

system. Following development, testing and migration of existing data, and training for

OSC and agency users, the complete project is expected to conclude in January of 2016.

Upgrade to Bank Imaging System

The Unisys InfoImage system will require a maintenance upgrade in 2015. This will be

necessary to maintain operability with the latest releases of Microsoft Windows Server

and Microsoft SQL Server. At the conclusion of the Core Banking upgrade, DST IT will

contract with Unisys to assist with an upgrade of the current environment. Due to the



166

integration with Core Banking, regression testing will be necessary to ensure check

images can continue to be delivered through the FLEXCUBE interface. This project,

expected to commenced in 2Q 2015, should be concluded by the end of that year.

6.3.2.5 Increase availability, quality, and use of self‐service technologies

Complete Implementation of Claims Fast‐Tracking Initiative

The first phase of the Claims Fast‐Tracking Initiative will be completed before the end of

2014. At that time, NCCash.com will be retired and UPD will be leveraging the Xerox

portal for claim initiation and approval. Data will also be provided to Xerox for publication

on MissingMoney.com. During the initial phase of implementation, automated approval

of claims will only be available for claims of less than $500, and enhanced authentication

using InstantID will not be activated. UPD will be monitoring performance of the Fast‐

Tracking portal and may adjust claim value thresholds and activate enhanced

authentication for automation of claim processing.

Workflow and Online Forms for Web Infrastructure

Utilizing the existing SharePoint infrastructure and other digital imaging tools in use

across the agency, DST IT will partner with OST to expand the use of business process

automation and online forms for internal processes. Tools for workflow and form

management are being evaluated for potential use; at the same time, existing workflow

technologies used for RSD and UPD business processes are also under consideration. A

number of processes that could benefit from business process automation have been

identified and are being considered in the evaluation of tools. DST IT will continue to

work with OST on the identification of an extensible workflow solution for SharePoint to

support these processes. Simultaneously, potential tools for online forms and data

capture will be evaluated. Following the selection and procurement of appropriate tools,

expected to be completed in 4Q 2015, OST and DST IT will establish a strategy for the

conversion of manual, paper‐based processes to electronically managed processes.

Travel and Business Expense reimbursement is likely to be one of the first processes

converted in 2016. Subsequent implementations of new processes will continue

throughout the year.

6.3.3 Continuously Improve Core Functions and Programs

6.3.3.1 Reassess the organizational structure of Legal, IT and SLGFD


Implementing the recommendations of the IT Operational Review will be the

predominate activity of the IT Division at the conclusion of the building move. The

recommendations put forth in the study call for activities to improve service delivery,

implement governance structures and processes, create stronger alignment with

business units, and expand the services delivered to DST.



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In order to improve service delivery, the division will conduct a comprehensive overhaul

of the processes and tools used in operational activities. Using the ITIL Framework as a

guide, processes around incident management and service request management will be

redeveloped and all staff will be trained in the new processes .The IT Division will replace

the existing custom Helpdesk system, currently used to manage incidents, service

requests, development activities, and project initiation requests, in contrast to industry

best practices. The agency will explore a tool to be used solely for incident and service

request management; ideally, an off‐the‐shelf solution constructed around the ITIL

Framework that will essential force the IT Division to conform to best practices.

As recommended in the study, the IT Division will focus a number of initiatives on

achieving better alignment with DST business units. The division has been in the process

of developing Service Level Agreements (SLA) with each unit, and this work will continue

into the 2Q 2015.The IT Division is working to create at least one dedicated Business

Relationship Manager role, an individual who will act as a single point of contact for the

relationship between IT and business operations. This individual will also be expected to

standardize communication with divisions and to incorporate performance measures and

reporting into regular meetings with agency division management.

In addition to improving alignment with business units, the IT Division will work with the

Office of the State Treasurer to develop departmental governance processes over

technology and analytics initiatives. Formal processes for project initiation, evaluation

and prioritization, coupled with an effective departmental steering committee, will

remove some frustrations over changing priorities and a perceived lack of transparency

into the selection and prioritization of initiatives. The establishment of a departmental

project management office (PMO) will also help inform the governance process by

monitoring and distributing resources across multiple projects and defining the true

capacity of the organization to execute multiple simultaneous projects. Lastly, the IT

Division will work with departmental management to secure more funding for IT

operations and ensure the allocation of IT costs are fairly distributed across the agency

relative to utilization of IT services. The implementation of asset management functions

in Microsoft SCCM will also assist with cost modeling as IT will have more accurate and

timely information on equipment deployed across the agency.

The IT Division will also focus on an expansion of technology services. As recommended

in the IT Operational Study, the division will place a higher emphasis on technology

innovation. The division has spent too much time focused on maintenance activities and

needs to partner with business users to envision and implement novel technology

solutions that will improve operational efficiency and/or citizen services. The IT Division

will be instituting an innovation program to develop and support new and interesting

projects and guide the most promising initiatives to full implementation. Innovation in

the area of citizen and constituent self‐service is the most important need for the agency.

Due to an increased demand for department services, most efficiency gains from

technology will involve solutions that empower individuals to gain information or initiate

transactions without the need for staff intervention. Innovation in the area of mobile

technology is also important, to allow departmental services to be accessible from any



168

device or platform, especially as the computer is being supplanted by the phone and

tablet as the primary consumer technology platform. The IT Division will also need to

enhance its abilities to support Bring‐your‐own‐Device (BYOD) programs, as staff will

also seek to interact with departmental IT systems using a variety of different technology

platforms.



169

6.3.3.2 Other Improvement Initiatives

Continue Data Matching Efforts

Session Law 2011‐230 requires that the Department of Motor Vehicles, the Employment

Security Commission, and the Department of Revenue must share information with the

Department of State Treasurer that can be used to identify potential claimants of

escheated or abandoned property. These agencies have up‐to‐date address information

on NC residents acquired through driver licensing, unemployment claims, and personal

tax returns. This address information can be matched against property records to identify

the current location of potential claimants. Claim forms and other informational materials

can be mailed or electronically‐mailed to potential claimants identified through the data

matching process.

UPD, with the assistance of DST IT, is currently working on conducting data matching

efforts with these agencies. Work in this area will continue; improving the accuracy of

matches, as well as broadening the sources of information, will lead to more successful

identification of property owners.

Since the North Carolina Retirement Systems are also under the management of the

Department of State Treasurer, information from these systems provides another

opportunity for the Unclaimed Property and Escheats Division to match against

approximately 660,000 records to identify the current location of potential owners of

unclaimed property.

Efforts underway in the Government Data Analytics Center (GDAC) to aggregate data

held by various State agencies may also be beneficial to this program. By leveraging the

GDAC, UPD and DST IT can conduct data matching against one aggregated repository of

information. The technical resources of the GDAC and SAS can assist with improving

matching accuracy and potentially utilize fuzzy matching or other data mining techniques

to identify non‐obvious property and owner matches.

Evaluate Unclaimed Property Management Systems

For many years, the UPS2000 system used by the UPD for the management of escheated

properties and claims was the only viable commercial product available for this purpose.

At one time, this system was used by 38 states for the management of unclaimed

property. Utilizing this system avoided costly custom application development and

maintenance efforts and ensured a robust and reliable tool for operational management.

The UPS2000 is aging technology; written in Delphi and making use of a client/server

architecture, it can be burdensome to maintain.

There are new entrants into the marketspace, notably, a solution recently implemented

in the State of Delaware. UPD and DST IT will continue to watch the marketspace for new

or enhanced products and seeks to seriously evaluate alternatives in the coming years. If

a decision is made to change platforms, it is anticipated that a procurement for a new

system would be initiated in late 2015.




170

Work is underway on major enhancements to ORBIT to address management of the

Firefighters' and Rescue Squad Workers' Pension Fund. Analysis of requirements for

enrollment and contribution intake have been conducted, and the designs for

modifications to the ORBIT Employer and Employee Self‐Service subsystems are being

developed. When complete, these modifications will allow members of the pension fund

to more accurately monitor their contribution and service history. It will also allow fire

and rescue squads to submit and manage rosters without the need for paper

documentation. Analysis is being conducted on benefit processes such as retirement,

transfers, refunds, and death benefits.

Functionality will be delivered incrementally throughout 2015 with final completion of all

work expected in 2016.

Complete Compliance Initiatives

As stated earlier, DST IT and RSD have started work to address issues related to the

administration and benefits from the QEBA plan established for recipients of high benefit

compensation. Work on this initiative will conclude in later 2014 with the resolution of

outstanding data integration issues and the generation of W‐2 documents for recipients.

Efforts are underway related to achieving compliance with Required Minimum

Distribution (RMD) rules. Members of the pension plans that are not in compliance with

RMD rules have been identified. These individuals will be contacted to begin withdrawals;

however, provisions must be made to accommodate benefit payments for individuals

actively employed by the State. RSD and DST IT will also explore avenues to identify the

current whereabouts of individuals holding dormant retirement accounts. Integration

with the GDAC and/or other repositories of data may provide valuable information for

contacting individuals.

Activities toward compliance with new statutory obligations began at the conclusion of

the 2014 General Assembly session. Legislation has been analyzed for impact to existing

systems and rough estimates of effort are being developed. Over the remainder of the

year, detailed business requirements will be developed from further analysis of new laws

and designs for ORBIT modifications will be developed. Implementation and testing of

system modifications will be concluded by the end of 2014. Enhancements related to

pension spiking, new vesting rules and the payment of interest upon withdrawal of

contributions will be given the highest priority.



171

6.4 Maximize the Talent of our People

Execute a Successful Building Move and Office Consolidation

The most pressing challenge for the IT Division over the next 4‐12 months is the

execution of a successful move of the Department of State Treasurer and consolidation of

all business units in a single facility. The agency must vacate the Albemarle Data Center

as quickly as possible and without disruption to critical business operations. A rapid

evaluation of available options and alternatives to the Albemarle Data Center must be

completed by January 2015, although strategies regarding DST IT infrastructure may be

revisited at a later time.

Since the move of the eight divisions of DST to a single facility must be conducted

without impact to normal operations, it will be conducted in phases. The execution of this

move must be timed to key operational periods – banking holidays, retiree payroll, and

reporting deadlines are just a few of the activities that must be taken under

consideration. Some business systems cannot be “moved” – parallel systems must be

setup at and existing systems migrated to the new environment. Since the division has

already made great advances in server virtualization, the move may require a parallel

SAN device to be replicated with the existing device in the Albemarle Data Center as

systems are migrated. Where necessary, the implementation of parallel systems may

create opportunities to upgrade existing system components as a new environment is

constructed. The IT Division will seek to leverage Windows Server 2012 and SQL Server

2014 as core system software on upgraded systems.

When the move is complete and all systems are migrated, any duplicate hardware

purchased for the transition period will be placed to service in the agency’s Disaster

Recovery environment. A “hot site” for disaster recovery, constructed to assume agency

operations within minutes, has long been a goal for DST. By moving excess equipment to

the Western Data Center (WDC), DST will begin to have an environment ready to support

this type of recovery.



172

7 Department of State Treasurer IT Organizational Structure

Deputy TreasurerChief Information Officer

60009330

NetworkingAnalyst

60009370

Information Technology Manager60009360


60009356


60009333


60009350


60009335


60009341

North Carolina Department of the State TreasurerDivision of Information Technology Services

Updated 9/9/2014


60009351


60009346


60009368


60009367

Contractor

Business & TechnologyApp. Analyst60009331


60009362


65004636


65004780


65004811




60009349


Business & Technology App. Analyst

60009051



60009332


60009358


60009357


Information TechnologyManager60009329



Technical SupportTech

60009217


60009339


60009344


60009348


60009359

ORBITIVR

HelpdeskCase Tracker

Core BankingPositive Pay

Bank InfoImageCheck 21

DynamicsSupply Inventory System

Internet/Intranet Sites SharePoint CoreiContact/List Serv

Investment SystemsUPP-IDMSUPS2000

UPP Audit SystemSoftware Deployment

RSD-IDMS

Database Admin/Mgmt and Development

RSD Data Warehouse SLGFD Audit SystemFin Data Reporting

Bond SystemIA – AutoAudit

TFS Admin

Information TechnologySecurity & Disaster

Recovery


60009355




60009340


60009337



60009347


60009345


60009364






60009363

Level I Support

Provide consultation, support and or t raining to clients. Provide basic support of hardware, applicat ions, operat ing systems and networking for desktop systems. Individuals are not involved in applicat ion development, system integrations or network analysis. Refer complex technical problems to higher level support.

Level II Support Analytical work providing consultation and support or training to the Technology Support Technicians. Provide advanced hardware, applicat ions, operating systems support for desktop issues and basic support of hardware, applicat ions, operating systems and networking for server systems.. Individuals are not involved in applicat ion development, system integrations, design or network analysis. Refer complex technical problems to higher level support.

Level I II Support

Advanced technical work providing consultat ion and support or training to the Technology Support Analysts. Provide advanced hardware, applications, operat ing systems and networking support for desktop and server areas. Responsible for design, implementation and oversight of programs or projects.


60088045


Contractor

28 19 3

Contractor

Contractor

Contractor



173

8 Additional Agency Requirements

8.1 Innovative Funding Solutions The Department of State Treasurer is uniquely funded – most the Department’s operating budget is

funded through investment proceeds from the North Carolina Retirement Systems, the State of

North Carolina Escheat Fund, and funds collected from local units related to the issuance of debt

instruments. The operating budget of the IT Division is funded by allocations from these self‐funded

units.

Recent industry benchmarking analysis from CEM has indicated that the State of North Carolina has

one of the lowest operating costs of similarly‐sized pension programs in the world, due in part to

relatively low IT‐related costs.

8.2 Opportunities for Statewide Initiatives The Department of State Treasurer is working with the Office of State Controller to incorporate cash

management functionality into the Core Banking system used for Statewide Banking Operations.

When complete, this implementation will replace a legacy statewide accounting application that is

currently run on mainframe technology.

DST has participated in the NCFACTS program by making data from the State Health Plan available

for analysis. The State Health Plan is also leveraging the resources of the GDAC to conduct analytics

on the finances of the plan and the performance of plan providers. The agency anticipates being able

to provide the NCFACTS program with information on the membership of the North Carolina

Retirement Systems in the near future.



174

Appendix A: List of Major IT Projects This purpose of this section is to provide list of major IT projects and applications (>$250,000) that are in progress or planned in this biennium. The table below maps each project to overall goals and strategies.

Project Name Short Description Related Goals and Objectives

Summary of Anticipated Benefits Approximate Timeframe

Fire/Rescue Modifications


Continuously Improve Core Functions and Programs

Compliance with Statute; More Accurate Actuarial Valuation

Complete 2Q 2016

Call-Center Upgrade

Replacement of unsupported Symposium and IVR call center


Vendor-supported system. More self-service functionality for members

Complete 3Q 2015

New UPMS Replace the State’s Unclaimed Property Management System


More self-service functionality for claimants. Faster claim response time.

Complete 4Q 2016


Implement Department-wide Case and Contact Management

Strategically Implement Technology-Based Applications

Better constituent services; metrics for personnel performance

Complete 2Q 2016

Vacate the Albemarle Building

Move all of DST to a single office complex.

Maximize the talent of our people

Collaboration; Improved Citizen Services; Refurbished facility for State of NC government use

Complete 3Q 2015

Core Banking and CMCS Implementation

Upgrade of State’s Core Banking system and replacement of OSC Cash Management System

Strategically Implement Technology-Based Applications

Improved integration with OSC; replacement of outdated CMCS mainframe system; upgraded infrastructure for more secure and stable banking operations.

Core Banking – 2Q 2015. Cash Management – 1Q 2016