Nearly one year later, the Pennsylvania Treasury's updated system helps officials take better advantage of early payment discounts, and better manage cash and investments to realize increased gains.
The Pennsylvania Treasury (PA Treasury) is reaping the benefits of a recently completed modernization project that is allowing it to more efficiently process billions of dollars in transactions.
“We are nine months into production and have processed about 9 million payments and about $55 billion dollars through the new system,” said PA Treasury CIO PN Narayanan.
Each year, PA Treasury processes more than 30 million transactions worth more than $75 billion based on recent past fiscal year transaction volumes. It is also the custodian of state funds, and invests state money. Its IT system interfaces with dozens of state departments and agencies that operate about 30 unique electronic financial data systems. Until recently, PA Treasury relied primarily on mainframe technology developed in the 1970s. The system was highly vulnerable to failure, costly to repair, and jeopardized timely payments to schools, hospitals, workers, suppliers, seniors and other citizens.
A major system failure the day before Thanksgiving 2008 pushed the department to action. But a tight state budget at the time made progress slow. By 2011, Pennsylvania's then-treasurer Rob McCord was able to obtain necessary bipartisan support from the Legislature and then-Gov. Tom Corbett's administration to proceed with the project.
“That started a comprehensive, multi-year transformation of PA Treasury and a modernization of its IT systems,” said Narayanan, who helped complete a similar project for the state of Delaware in 2010.
The transformation program contained several projects, including networking, infrastructure, data center, and an ERP project to replace the failing mainframe platform.
“One of the main goals was a product that automates advanced financial controls across PA Treasury’s payment process to help prevent errors, waste, misuse and fraud,” Narayanan said.
For the ERP part of the modernization, which began early in 2011, PA Treasury selected Oracle’s PeopleSoft Enterprise Resource Planning, Advance Control (Governance Risk and Compliance) software and CherryRoad Technologies as its implementation partner. By June 2014, the system was up and running. Even more notable is the fact that the department completed the project on time and $7 million under budget.
Now almost a year in, Narayanan said the system is “working very well” and processing about $300 million per day.
“The change management/communication was most difficult part of the project,” said Narayanan.
The new ERP system is helping the PA Treasury increase the average annual savings realized through its pre-transactional audits by automatically flagging erroneous payments. The state can then use the savings toward strategic projects and programs.
A few minor technical problems occurred in the first few weeks after the cutover, but PA Treasury worked diligently to solve them.
“We experienced hurdles in unexpected places, [like] check printing and mail processing,” said Cynthia Cranmer, chief of staff for PA Treasury. “Working with 65 different agencies, we discovered how much variation of these processes were programmed into the old system. Commonwealth agencies and programs have very specific preferences on check release dates and mail dates. Treasury standardized processing and check releases to accommodate all stakeholders.”
In addition to improving its pre-payment auditing capacity to catch erroneous payments, the new system is also enabling PA Treasury to take better advantage of early payment discounts, and better manage cash and investments to realize increased gains.
“Treasury’s transformation and modernization project changed Treasury operations from a paper-based bookkeeping system to an automated accounting system resulting in some remarkable changes in staffing and access to information,” Cranmer said.
Cranmer added that staffing levels to process transactions reduced by approximately 50 percent, and that PA Treasury staff now employs a higher skill set, allowing them to redeploy some employees previously engaged in manual data entry and data review to areas of greater need.
“Once a team of data entry positions, Treasury staff now employs problem-solving skills to respond to stakeholder inquiries,” she said. “Transaction information, once solely a paper-based reporting system, can be accessed at any time by various staff and stakeholders. Authorized users can query the system to find particular payment, revenue and appropriation information as needed.”