Legislature(2017 - 2018)SENATE FINANCE 532
02/06/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Shared Services Initiative | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 6, 2018
9:04 a.m.
9:04:31 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
MEMBERS ABSENT
Senator Natasha von Imhof
ALSO PRESENT
Sylvan Robb, Deputy Commissioner, Department of
Administration; Kevin Brooks, Shared Services Director,
Department of Administration.
SUMMARY
^PRESENTATION: SHARED SERVICES INITIATIVE
9:05:00 AM
SYLVAN ROBB, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, shared that she and her staff would update
the committee on progress that had been made on shared
services.
KEVIN BROOKS, SHARED SERVICES DIRECTOR, DEPARTMENT OF
ADMINISTRATION, spoke to the presentation "Department of
Administration Shared Services of Alaska Overview,"
Mr. Brooks turned to Slide 2, "Shared Services of Alaska
(SSoA) Mission":
"To provide back office support of common
administrative transactions to allow state departments
to use budget and staff to focus on their core mission
and responsibilities."
?SSoA merged with legacy functions of the Division of
General Services in FY2018 budget to form a single
division.
9:07:31 AM
Mr. Brooks looked at Slide 3, "Shared Services of Alaska,"
which showed a table that provided an overview of shared
services. He detailed that the entire division budget was
$77,670.1, approximately half a million of which was
receipt driven; there was $481.4 in UGF and everything else
was billed out or funded through program receipts. He said
that the primary component allocations included: Business
Transformation Office, Accounting, Purchasing, Mail and
Print Services, State Leases, and State Facilities. The six
components made up the appropriation that was now Shared
Services, totaling $77,670.1.
Mr. Brooks showed Slide 4, "Changes in the FY19 Budget":
? $500.0 DGF Business Transformation Office
collections revenue and vendor fees
? $138.0 DGF Purchasing State Surplus sales growth
-$1,000.0 I/A Leases Space reduction and cost per
sq foot reduction due to vendor negotiations
-18 PFT/ -3 PPT tr56nsfer maintenance staff to DOT
9:09:54 AM
Mr. Brooks reviewed Slide 5, "SSOA Three Major
Initiatives":
? Travel and Expense
? Collections
? Accounts Payable
Mr. Brooks spoke to Slide 6, "Travel and Expense
Initiative":
? Doing work for 12 departments
? Processing 30% of approximately 40,000 annual trips
? Goal is 80% by June 30, 2018
? Streamlined processes
? Better utilization of State's accounting system
IRIS
? Integrated Resource Information System
Mr. Brooks said that the primary means of travel for the
department was air travel. He shared that the initiative
had been approached in waves; smaller departments had been
considered all at once, larger departments had been broken
b=down into divisions or regions. He expounded on the
streamlining of state agencies processes, particularly the
use of the new Integrated Resource Information System
(IRIS) to establish standardized procedures that all travel
would be processed under.
9:12:16 AM
Co-Chair MacKinnon asked whether the state was working with
enterprise agencies such as the University, Alaska
Industrial Development and Export Authority (AIDEA), in the
standardization process, or was the effort directed toward
centralized government.
Mr. Brooks replied that the initial work was with state
departments only. He shared that the quasi-governmental
corps could be in scope but were not the priority. He said
that one of the premises was that the department used the
IRIS system. He said that there was an E-travel Office that
had negotiated discounts with Alaska Airlines that was
available and was outside of the scope of the
reconciliation.
Senator Stevens was concerned whether there was an attempt
to coordinate Information Technology (IT) services within
the state departments.
Mr. Brooks stated there were a number of initiatives in
play.
Senator Olson queried the anticipated savings from shared
services.
Mr. Brooks stated that anticipated savings would be through
reduced staff. He noted that OMB had taken a 10 percent
reduction of positions in the FY18 budget. He said that a
similar statewide reduction would be seen in the FY19
budget of $500,000 in general funds, $1 million total.
9:16:08 AM
Mr. Brooks displayed Slide 7, "Collections Initiative":
? Hired Account Control Technology, Inc. (ACT) to work
on behalf of the state to collect delinquent debt
? ACT is now working on Alaska Court System debt
? $7 million over ~31,000 accounts
? ACT is now working on Department of Law legacy debt
? $153 million over ~90,000 accounts
? ACT is now working on Alaska Permanent Fund debt
? $1.5 million over ~1,100 accounts
? SSOA coordinated with Permanent Fund Dividend
Division on garnishments in October 2017
? $6.1 million over ~41,000 accounts
Mr. Brooks stated that there were debt-collection efforts
throughout the state, but not to a large degree. He
detailed that the collections initiative hired the
contractor Account Control Technology, Inc., who was paid
14 percent of debts collected.
9:20:16 AM
Vice-Chair Bishop asked for more background on the
contractor Account Control Technology, Inc.
Mr. Brooks agreed to provide more information.
Senator Micciche was curious if a 14 percent profit was
typical for collection contractors.
Mr. Brooks detailed that the department had done an RFP and
had chosen from a half-dozen bidders. He believed that the
contract had been competitively bid and that the department
was comfortable with the price of 14 percent.
Senator Stevens asked for further explanation on the
payment schedule and whether the 14 percentage could
increase over time.
Mr. Brooks explained that the schedule increased in step
from 14 percent to 17 percent to 24 percent, capping out at
24 percent after 3 years. He said that the state was within
the first year of working with ACT.
Co-Chair MacKinnon asked what progress had been made on
collections in the past year of contractor efforts. She
wondered whether consideration had been given for the
recovery rate when the RFPs were considered.
Mr. Brooks clarified that permanent fund dividend
garnishments were separate from the work done by ACT. The
state informed ACT when dividends were garnished, and the
PFD total was subtracted from the total debt. He detailed
the state's relationship with ACT and the various types of
debt collected. He said that the rate of collection had
been slower than what had been hoped for, but it was
understood that the first few years would be slow for debt
collection.
9:26:12 AM
Mr. Brooks continued that ACT had subcontracted out the
legacy debt and it was hoped that a dent would be made in
the legacy debt overtime.
9:27:15 AM
Co-Chair MacKinnon asked of the debt listed as in
possession of ACT, how much of the debt already gone
through garnishment proceedings.
Mr. Brooks answered that the debt had gone through
garnishment proceedings and that the garnishment process
happened annually, even debt that had been placed with ACT.
Co-Chair MacKinnon asked whether ACT had collected any
funds for the state.
Mr. Brooks relied yes, hundreds of thousands of dollars had
been recovered.
Co-Chair MacKinnon requested that the total be provided at
a later date.
9:28:30 AM
Mr. Brooks turned to Slide 8, "Accounts Payable
Initiative":
? Kaizen process review of State procurement functions
in June 2017
? Kaizen process review of state accounts payable
functions in September 2017
? Transaction testing in state accounting system
(IRIS) is ongoing through January 2018
? Establish department "wave" schedule for onboarding
department accounts payable functions throughout
remainder of 2018
9:30:28 AM
Mr. Brooks spoke to Slide 9, "SSOA Growth and Activity
Calendar Year 2017," which demonstrated the "wave schedule"
mentioned on the previous slide.
Mr. Brooks discussed Slide 10, "SSOA Growth and Activity
Calendar Year 2018 (Roadmap)," which showed the growth and
activity for 2018. He noted that the department was looking
into travel and expense and would be making a second pass
trough to revisits the departments to pick up any remaining
work. He pointed out the gap in July and August, which was
the appropriation period in the accounting system and was a
very busy time across the state, which was why a break was
given during this time. He said that different departments
had debt, but not all departments.
9:32:19 AM
Mr. Brooks thought he explained the progress of shared
services initiatives. He referenced questions about
positions and shared that the division had hired two
program managers. He discussed the determination that
travel booking was best done by departments. He said that
the department was focused on reconciliation only.
Mr. Brooks said that some of the division's employees had
gone on to benefit other departments. He felt that the
division would work forward int eh future to find further
efficiencies in the state.
9:36:08 AM
Co-Chair MacKinnon asked whether shared services were
finding efficiencies and reducing the costs of delivering
services.
Mr. Brooks replied in the affirmative but lamented that the
work was happening more slowly than had been hoped but that
rough times were expected during the start-up of any
venture. He said that efficiencies would continue to be
sought out by the office, and with fewer staff.
9:38:18 AM
Ms. Robb added that the department did not envision their
work ever being done but that continuous improvement and
additional efficiencies would always be the goal.
Co-Chair MacKinnon asked how the division was measuring up
to expectations related efficiencies, opportunities for
cost savings, and better work performance laid out by an
Ohio contractor during a past meeting with Department of
Revenue Commissioner Sheldon Fisher.
Ms. Robb stated that the division continued to work with
the Ohio contractor, who continued to provide support. She
reiterated that the work was not happening as fast as had
been anticipated, but that the department was pleased with
the direction the work was flowing.
Co-Chair MacKinnon wondered about the speed in which the
work was progressing.
Ms. Robb stated that much of the process had been built
from the ground up, and there had been a number of lessons
learned. She anticipated that in rolling out the accounts'
payable initiative, things would happen more smoothly.
Co-Chair MacKinnon asked whether there had been a positive
reduction to full-time positions as a result of shared
services.
Mr. Brooks reiterated that that only the two program
managers leading the initiative had been added, all other
positions had previously existed within the departments. He
said that the net number of positions was a reduction.
9:43:00 AM
Co-Chair MacKinnon asked for a breakdown of the initiative
hiring process. She feared that the public could be
confused on the issue.
Senator Micciche wondered how much the private sector had
been used by the department during the process.
Mr. Brooks relayed that the department had sought some
private sector high level accounting assistance. He said
that the department was looking to private sector
alternatives where possible.
Senator Micciche asked whether the state had revised their
travel philosophy and policy, and whether random compliance
checks were issued for departments.
Mr. Brooks replied in the affirmative. He had observed that
overall travel had been reduced from 53,000 to 40,000. He
noted the various methods of communication employed by
departments in the place of physical travel.
Senator Micciche asked whether there was new travel policy
and random compliance checks.
Mr. Brooks stated that every department reported their
travel activity to the Governor's office on a quarterly
basis. He said that departmental travel was reviewed on a
regular basis.
9:46:51 AM
Senator Micciche asked about space utilization and
efficiency. He asked whether the administration determined
an overall reduction in space, or a goal for reduction, or
if the matter was left to departments.
Mr. Brooks replied that department's requested space, which
was then negotiated. He said that for the last few years
there had been a focus on higher utilization of state-owned
space. He stated that all state agencies were looking for
efficiencies in the utilization of space and getting out of
high cost leases.
Senator Micciche asked for any reports that might be
available on those efforts.
9:49:26 AM
Senator Olson asked about the travel initiative, and the
subject of the Alaska Airlines Mileage Plan.
Mr. Brooks stated that individual state employees did
accrue miles. He did not consider that state employees were
travelling in order to accrue miles, but rather travelled
for state business.
Co-Chair MacKinnon asked about peak travel times and
wondered about a trip count based on months of travel.
Mr. Brooks stated that he would provide detailed travel
information by department.
Co-Chair MacKinnon asked whether the month of December was
a peak travel time.
Mr. Brooks replied in the negative.
Co-Chair MacKinnon requested travel details for the
Department of Health and Social Services.
9:52:15 AM
Vice-Chair Bishop hoped to see the DGF spend compared to
the UGF spent on travel.
Mr. Brooks responded that he could not speak to the fund
source by line item. He said that he would get back to the
committee with the information.
Vice-Chair Bishop said that the number could be aggregate.
He said that he cut travel in his department when he was a
commissioner.
Co-Chair MacKinnon wanted to see how departments were
travelling throughout the year. She thought it was
important to consider that certain grants required on-site
checks of different projects, which required travel.
Co-Chair MacKinnon discussed housekeeping.
Co-Chair MacKinnon thanked Mr. Brooks for his service to
the state.
ADJOURNMENT
9:55:16 AM
The meeting was adjourned at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022618 SFIN DOA SSoA 2-6-18.pdf |
SFIN 2/6/2018 9:00:00 AM |
SB 144 |