what does it take for state government to consistently deliver high performance? october 23, 2013...
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What Does It Take for State Government to Consistently Deliver High Performance?
October 23, 2013
Kinney Poynter, NASACT
Keith Johnson, Oracle
Michelle Strauss, State of Delaware
PN Narayanan, Pennsylvania Treasury
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.2 2
Opening Remarks
ModeratorR. Kinney PoynterExecutive Director
NASACT
SpeakerKeith Johnson
DirectorState and Local Government
Public Sector Industry Business UnitOracle
SpeakerMichelle Strauss
Assistant Director of Financial SystemsDepartment of FinanceDivision of Accounting
Delaware
SpeakerPN Narayanan
Chief Information OfficerPennsylvania Treasury
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.3 3
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Reaching New Heights: Providing Consistent and Sustainable High Performance at the State Level
Report Summary by Oracle and the National Association of State Auditors, Comptrollers and Treasurers (NASACT)
Keith JohnsonOracle Public Sector IBU
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Introduction
• It’s no secret these are challenging fiscal times – state governments face deep budget cuts, eroding tax bases and declining property values
• It is more important than ever for state governments to create a high-performing system that consistently
maximizes public value • So what does it take for state
government to consistently deliver high performance?
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Why Look at High Performance Government?
• Improving Performance not new – took on new urgency during fiscal crisis– Performance Stat, CopStat became popular in 90’s.
Focused on operational efficiency– Performance Based Budgeting, Benchmarking, Lean,
Six Sigma and other techniques
• Wide variety of tools, techniques used. Limited “COTS” capabilities
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“High Performance” includes many areas
• Operational efficiency such as scorecards, process improvement, quality
• Community Conditions – Becoming more widely used measure of how to gauge citizen perception and view of service quality/deficiencies.
• Efficient deployment of technology resources. Cloud computing, Infrastructure as a service, Shared Services.
• Guarding against Fraud, waste and abuse. • Transparency – providing data to citizens and getting
feedback.
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.8
Survey Results:
Talent ManagementCloud ComputingComplianceTransparency
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Survey Results18 States, 2 US Territories Responded
+ Puerto Rico & Guam
Before states can take steps to improve systems and more efficiently deliver services, they need to evaluate how programs perform today.
33% track performance in spreadsheets
29% track with legacy, homegrown analytical tools
8% use COTS analytical tools
17% do not measure program performance
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1. Aiming High - Talent Management
States rank recruiting, training, retraining talent as the most important thing to support High Performance
Less Than 10%
10% to 20%
30% to 50%
28%
37%
9%
50%+ 2%
What % of your departments workforce will retire in the next 5 years?
48%Yes
52%No
Does your department have adequate staff to perform its job?
Can you attract and retain younger employees to meet your workforce needs?
Yes – 46%No – 38%? – 16%
eRebublic Survey June 2013
Copyright © 2013, Oracle and/or its affiliates. All rights reserved.11
Aiming High - Talent Management
Develop a Social Recruiting Strategy Engage Your Line Managers Prepare Now for Upcoming Talent Shortage Take Stock of Internal Talent Line Up Future Leaders Automate Talent Management Manage Talent Anytime, Anywhere
Some Talent Management Best Practices
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2. Aiming High - Cloud for High Performance
States are split on the use of cloud-based solutions. Of those using cloud:
17% for technical applications i.e. email, SharePoint in the cloud
13% for business applications i.e. finance,
HCM
25% using for a variety of purposes applications
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Overcoming Cloud Hurdles
Despite challenges, many states have plans to adopt cloud solutions in the next five years. What cloud solutions are they considering?
42% email
38% document management
25% human capital management
17% financial management
Take Away: Cost savings and efficiency as the primary reason for adopting cloud services
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3. Keeping Score – Tracking Compliance
Internal Controls
50% tracking is not automated 0% full automation
Improper Payments Act 42% don’t automate tracking
Segregation of Duties 25% tracking is partially automated 58% no automation
States must comply with legislation and mandates, but a majority of states are not leveraging automated tracking.
Take Away: Automating administrative processes saves time and budget, and provides real-time information on compliance status
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Foul Ball – Identifying Fraud, Waste and Abuse
Fraud, waste and abuse lead to inefficient spending, misuse of tax dollars and public distrust. Unfortunately, many states fall victim to fraud, waste and abuse
each year.
What type of fraud are organizations experiencing?
71% say employee fraud
67% indicate recipient fraud
63% site expense related fraud
50% say provider fraud
Take Away: States should consider technology tools to help establish better tracking systems to detect fraud and identify the sources of waste
What are organizations doing about fraud?
33% are using or implementing systems to detect fraud
29% are using fraud detection software
25% are enhancing reporting systems
25% are requiring recipients to take action when fraud occurs
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4. Visualizing a Win – Government Transparency
Transparency is critical to ensuring tax dollars are spent appropriately, establishing public participation and collaboration
Take Away: A comprehensive government transparency website is important for states
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Charting a Path
•Evaluate current programs•Examine technology options•Educate and share best•Automate•Eliminate fraud and abuse
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Reaching New Heights: Providing Consistent and Sustainable High Performance at the State Level
•PN Narayanan, Chief Information Officer, Pennsylvania Treasury
•Michelle Strauss, Assistant Director of Financial Systems, Department of Finance, Division of Accounting, State of Delaware
•Bob Sabo, Executive Director Oracle Public Sector Industry Business Unit
STATE OF DELAWARE
Delaware’s Financial SystemFirst State Financials (FSF)
Legacy System DFMS – State System for 20+ years
PeopleSoft Implemented 8.9 in July 2010 with Integration
to HCMS Upgraded to 9.1 in October 2012 Project and Executive Sponsor Support Working with the State Technical and Change
Management team
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Delaware’s Background
State of Delaware 77 Organizations
• 33 State Agencies• 19 School Districts• 23 Charter Schools• 2 Higher Education Institutes
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Financials GL & KK AP, PO & ePro Billing & Accounts Rec Asset Management Project Costing Grants Contracts Cash Management Bolt-on
Modules Implemented
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Transparency http://www.delaware.gov/topics/transparency
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Transparency http://www.delaware.gov/topics/transparency
Web CheckbookState Employee Credit Card Transactions
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Improving Processes
Hackett Benchmarking 2006 in old system 2013 after upgrade
Communication with Organizations Financials Advisory Committee (FAC) Presence at School Business Manager (BM)
Meetings Notifications and Alerts
Interfaces Reporting Contact with Oracle & other State’s
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Hackett Benchmarking
Improvement seen from 2006 to 2013 Looking at other areas for improvement
Reviewing organization’s workflow Expense Module Scanning Ghost Card
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Communications
FAC Meet bi-monthly Controllers from all organizations invited Discuss any upcoming items & any issues
School BM Meeting K12 Group Charter School Meeting & Local School District
Meeting
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Communications Continued
Service Desk Notifications Alerts Available for end users to report issues and
receive assistance
Communicate! Communicate! Communicate!
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Interfaces
Standard Interfaces Time saved from dual data entry Interface file formats posted on the extranet Work with the organizations on testing Insert job into our cybermation schedule
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Reporting
Current reporting Mobius/Document Direct
Other reporting tools Query nVision
RFP Issued Expectations
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Know Your Resources
Oracle Other States Alliance Conference HEUG/PSUG Calls
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Interactions
End Users Key User Groups Hackett Oracle Other States
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y
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GRC Advance Controls Project at PA Treasury
PN NarayananChief Information Officer
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Copyright The Pennsylvania Treasury Department. All Rights Reserved 35
Organization Overview• Processed about 35 million payments worth more
than $75 billion last fiscal year.
• IT systems manage about $15 billion in State assets.
• Unclaimed Property program collected $300 million and returned over $100 million, generating nearly $200 million for the General Fund in FY 12-13.
• PA 529 College Savings Program is setting new records: nearly $3 billion in assets, serving 177,000 accounts as of June 30, 2013.
• Prevents an average of $100 million in erroneous payments annually through pre-transactional audits.
Rob McCordState Treasurer
GRC Advanced Controls
Copyright The Pennsylvania Treasury Department. All Rights Reserved
• All payments by the Commonwealth of PA reviewed by Fiscal
Review
• 35 million transactions per year; $75 Billion in spend per year
• Detect duplicate and incorrect payments
• Maintain audit checklists
• Collect metrics
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Fiscal Review
Copyright The Pennsylvania Treasury Department. All Rights Reserved
• All payments by the Commonwealth of Pennsylvania to be reviewed by GRC Advanced Controls
• Detect Duplicate and Incorrect Payments
• Two phase implementation –
• Phase 1: 5 Controls with current legacy system
• Phase 2: ERP+GRC Go live July 2014 (70 analytics - 25 controls)
• Deploy additional controls planned for CY14
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Adv Controls – Project Objectives
Copyright The Pennsylvania Treasury Department. All Rights Reserved 38
Two Phase Strategy
Phase 2 PeopleSoft Go-Live
Jan 2013 July 2013 Jan 2014 July 2014July 2012
Phase 1 GRC Project kick off
Phase 1 GRC- 5 controls
Copyright The Pennsylvania Treasury Department. All Rights Reserved
Before GRC Advanced Controls
Payment Requests
SQL /Legacy
Fiscal Review TeamAgencies Payment Requests Current Payment System
• Sampling• 100% over threshold
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Custom builtSQL system
E-Business
Copyright The Pennsylvania Treasury Department. All Rights Reserved
Phase 1 – GRC Advanced Controls
SQL/Legacy
Fiscal Review Team
Daily Graph Update Job
~20 mins
Agencies Payment Requests Current Payment System
• Risk Graph• Map Reduce Enabled –
4 dedicated machines• Control Analysis 15-20mins• Linux• Oracle DB
GRC Advanced Controls
Custom Business Objects to payment
tables using GRC Extensibility Framework
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Payment Requests
GRC
E-Business
Copyright The Pennsylvania Treasury Department. All Rights Reserved
Phase 2 – GRC + PeopleSoft
Fiscal Review TeamAgencies Payment Requests PeopleSoft Financials (New Payment System)
• Risk Graph-updates • Map Reduce Enabled –
4+ dedicated machines• Control Analysis • Linux• Oracle DB
GRC Advanced Controls
Daily Graph Update Job
Standard GRC Connector for
PeopleSoftAuto Payments
on Hold
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SQL/Legacy
Payment Requests
PeopleSoft GRC
Release Payments on Hold not selected for audit
E-Business
Copyright The Pennsylvania Treasury Department. All Rights Reserved
1. Phase 1 Pilot Project
a. Split Payments
1. Using Vendor payments – PA 0006
2. Using Advance accounts – PA 0007
b. Payment over a threshold value. PA 0008
c. Payment with missing TIN PA 0009
d. First Payment – PA 0011
2. Phase 2 ERP Integration
70 analytics – 25 Controls
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Key Controls - Examples
Copyright The Pennsylvania Treasury Department. All Rights Reserved
Partial Definition
Split Payments
4 Business Objects
10 filters
2 Functions
9 Attributes
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Copyright The Pennsylvania Treasury Department. All Rights Reserved 44
Project Results/Benefits
1 Sample weekly data, 2 Ready for Fiscal Review – not actual savings
ControlSelected by
Control $ Value2Selected by
Control $ Value2
PA 0006 1689 2.26 million 3624 3.98 million
PA 0007 229 60K 244 108K
PA 0008 190 48 million 240 38 million
PA 0009 579 368K 520 390K
PA 0011 801 14 million 1168 20 million
Week 1 - Total Payments1 : 92,613 = $1.85 billionWeek 2 - Total Payments1 : 91,068 = $580 million
1 Sample weekly data,2 Ready for Fiscal Review – not actual savings
Copyright The Pennsylvania Treasury Department. All Rights Reserved
• Complete the Integration with PeopleSoft
• Build Analytics out of GRC Results
• Help Agencies to identify the problems at source
• Refine controls to meet changing needs of government regulations and code.
• Develop a dashboard for executive overview
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Future Expansion Plans
Copyright The Pennsylvania Treasury Department. All Rights Reserved
Treasurer Rob McCord:
“We are a fiscal watchdog that ensures tens of billions of dollars in payments are lawful and correct.”
• Fiscal review is ‘Mission Critical’ business process for Treasury• $75 billion spend & 35 million transactions mandated to be reviewed• Enable continuous improvements for upstream Agency processes• Realized value before ERP go-live with GRC Advanced Controls
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Summary
<Insert Picture Here>
The Path to a High Performing GovernmentKeith JohnsonOracle Public Sector IBUOctober 24, 2013
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Questions
• How closely aligned is the budgeting and performance management process at your organization? How closely aligned should it be?
• What process improvement methodologies turn ideas into implemented savings in a culture resistant to change?
• How do you overcome resistance / lack of acceptance?
• How can you manage performance improvement programs that cross departmental lines?
• What tools should you invest in to support high performance?
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Things are changing!
• Economic/budget crisis– Fewer resources – greater demand
for efficiency• Internet savvy citizens demand more
– Demand “commercial” like access to government
• Demands for transparency– What is my government doing?
• Demands for accountability– How is my government doing?
• New technology options– Cloud – Advanced Web – Social
Networking• Private Sector Techniques
– Six Sigma, Lean, TQM etc.
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Why can it be difficult?
•Resistance to change• Different way to make decisions• Agency resistance• Political Agendas
•Methodology paralysis• (So many choices, where do we start?)
•Change costs money (at least up front)•Who has time to do this!
“Why is performance information often least used in the worst fiscal times?” Scott Pattison – Executive Director, National Association of State Budget Officers – March 2012
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Better, Faster, Cheaper Techniques• Use Budget and Accounting as Structural Tools to Drive Change: Reward Results
Not Effort (Ex. Performance Budgeting)• Enhance Program Management Through Dynamic, Transparent
Dashboards (Ex. Data Warehouse, Business Intelligence)• Understand True Costs as Gateway to Competition/Outsourcing (Ex. Cost
Analysis/Activity Based Costing)• Change Incentives for Consumers: Drive Efficient Behaviors (Ex. Workforce
Analysis and Incentives)• Measure and Reward: Use Stat Programs That Include Costs (Ex. Performance
Analysis)• Leverage Technology and Digital Solutions (Ex. Cloud, BI, Social Media, Risk
Analysis)
Better, Faster Cheaper – A Framework for Operational Efficiency.Stephen Goldsmith – Harvard Kennedy School of Government
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Better, Faster, Cheaper Techniques• Use Data Analytics and Big Data to Unlock Value (Ex. Data Warehouse, Cross
source analysis – warehouse, social media)• Apply New Rules for the Labor-Management Game (Ex. Job analysis, business
process changes)• Structure Shared Services Correctly (Ex. Business Process Analysis, standardize
processes where possible)• Governing by Network: (leverage private sector, philanthropy, nonprofits, citizen
volunteers)
Better, Faster Cheaper – A Framework for Operational Efficiency.Stephen Goldsmith – Harvard Kennedy School of Government
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Best Practices
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Performance Management
• Systematic approach to improving results through evidence-based decision making, continuous organizational learning, and a focus on accountability for performance.
• Integrated into all aspects of an organization’s management and policy-making processes, transforming an organization’s practices so it is focused on achieving improved results for the public.
A Performance Management Framework for State and Local Government - The National Performance Management Advisory Commission - 2012
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• Performance Management ensures public funds are effectively used
• Budgeting and Planning ties in performance objectives with expenditure goals
• Cost/Risk analysis identifies elements for detailed improvement/fee structures/procurement options and audit/control optimization.
Elements of High Performance
Solutions
Cost/Risk Analysis
Public Transparency
Performance Management/Techniques
Budgeting and Planning
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How do you start?
•You must have both executive and legislative buy in!*
•Get educated – there is no shortage of information and examples
•Determine what your jurisdiction needs• How adaptive is your existing culture?• What shape are your systems in today?• What pace of change can you handle?• Can hot button issues hinder/help progress?
*I know. Every presentation says this. That’s because it its true.
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How do you start?
• Incremental or transformational change?• Look across multiple budget cycles/fiscal
years to fully implement• Fully plan your work and work your plan!
•Define technology infrastructure• Remember - this is not a technology
project!
•Sell the benefits• Develop wide support by emphasizing
how this will help legislators and citizens.
• Include transparency
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Getting Started – No Shortage of Sources•Research Performance Management methodologies
– NPMAC Framework – National Performance Management Advisory Commission
– Performance Management Sourcebook (GFOA)– Rutgers, Public Performance Measurement and Reporting
Network– Collins Center for Public Management - University of
Massachusetts Boston– The Performance Institute– Government Performance Project – Pew Center for the
States– Government Accounting Standards Board – Service Efforts
and Accomplishments Guide– Alliance for Innovation – Arizona State Univ/ICMA.– Many Federal, State and Local Websites
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Federal Performance Management Sources
• OMB Circular A-11, Part 2, Preparation and Submission of Strategic Plans, Annual Performance Plans, and Annual Program Performance Reports
• Government Performance and Results Act of 1993 (GPRA) • Government Performance and Results Modernization Act of
2010 ( On January 4, 2011, President Obama signed the GPRA Modernization Act of 2010)
• OMB Testimony on GPRA Modernization Act • Memorandum: Delivering on the Accountable Government
Initiative and Implementing the GPRA Modernization Act of 2010 (04/14/2011)
• Senate Committee on Governmental Affairs GPRA Report
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Additional Resources
• Report: Reaching New Heights: Providing Consistent and Sustainable High Performance at the State Level
• Resource Center: Public Sector Enterprise Performance Management
61
Questions?
ModeratorR. Kinney PoynterExecutive Director
NASACT
SpeakerKeith Johnson
DirectorState and Local Government
Public Sector Industry Business UnitOracle
SpeakerMichelle Strauss
Assistant Director of Financial SystemsDepartment of FinanceDivision of Accounting
Delaware
SpeakerPN Narayanan
Chief Information OfficerPennsylvania Treasury
6262
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