SHARE: Michael Chmura SHARE Special Projects Leader Department of Information Technology

1. SHARE Special ProjectCash Remediation Phase IIPlanning and Implementation CertificationOctober 22, 2014 SHARE: Michael Chmura SHARE Special Projects Leader Department of Information Technology Requesting Agency: Ricky Bejarano Deputy Secretary and Controller Department of Finance and Administration

2. Current State • The State developed many functional customizations and “shadow systems” during SHARE’s original implementation. As a result: • External payment systems are not integrated into SHARE • SHARE does not contain all of the bank accounts owned by the State • Reliance upon “Shadow Systems” has negatively impacted the ability to produce the CAFR • The purpose of these customizations and shadow systems were to replicate the processes and systems that were in practice before SHARE, driving an inefficient and error prone environment: • Processes are labor intensive and therefore is subject to manual errors • General Ledger maintenance process and the process ownership is not clearly defined • System rules governing transactional accounting need to be updated and enforced • General Ledger entries are inconsistent and controls need to be defined • The State’s ability to produce required financial reports that meet accounting standards, to reconcile cash, as well as to prepare for the upgrade to a newer version of PeopleSoft has been adversely impacted as a result as these current conditions. • The DFA CAFR Reporting Project and Historical Cash Reconciliation Project are both underway. These projects are not dependent on Cash Remediation Phase II, but will be coordinating with the project team as there are synergies between the three projects.

3. Project Objectives Focus on these areas with the associated business process redesign objectives will institute broadly accepted practices and mitigate the adverse effect of customizations and shadow systems on accuracy, controls and timeliness

4. Why now? Four Factors are Driving Urgency • Near-term realization of dramatically improved accounting processes for the State: • System Process Redesign: Adopting SHARE-delivered functionality thereby mitigating operational risks related to customizations, shadow systems and manual, error prone activities and interfaces • Accounting Process Redesign: Adopting industry standard accounting practices thereby mitigating operational risks related to insufficient controls, accuracy and timeliness, and efficient and effective State accounting processes: • Performance Enhancement: Realizing higher levels of process performance, controls and accuracy for the State’s accounting practices. • Implementation of compliance requirements related to audit findings: • Reduce ongoing exposure related to non-compliance with accounting standards as well as financial and system audit findings • Implement additional controls related to the Chart of Accounts, Configuration, and Security, which will provide the State increased data reliability • Achieve proper division of accounting responsibility between Agencies and DFA • Attain consistency in internal and external financial reporting in order to produce a compliant CAFR • Achieving these business results within the next 10 months • Setting the stage for a successful SHARE upgrade: • Implementing the process and system enhancements in the 8.8 environment will reduce upgrade project complexity and risks due to having BPR implemented before the upgrade begins

5. Summary of Scope

6. Project Timeline, Resources & Communications Project Team Composition Key Project Stakeholder Communications

7. Deliverables Summary

8. Deliverables Summary (cont’d)

9. Risks, Dependencies and Assumptions Risks Dependencies Assumptions • Sufficient state staff resource availability and project performance • Delay in funding, procuring, or contracting could push delivery dates • Organizational readiness • Agency modification of payment source systems • Completion of the project within the funding appropriations period • Availability of non-production SHARE financial environments for development and testing • Agency payment systems will require modification to their processes and interfaces • External system integrator services will need to be engaged • SHARE delivered processes and functionality will be used • Agencies will be able to meet project deadlines including timely executive decisions

10. Budget and Funding Sources DOT funding enables immediate project initiation resulting in new process implementation in 1Q FY16. Otherwise new process implementation would occur in 4Q FY16 at the earliest.

11. Summary • Cash Remediation Phase I was successfully delivered in February 2013. It automated the State’s cash reconciliation processes and had a dramatic impact on process efficiency and controls • Phase I was a ‘point forward’ solution and Historical Cash Reconciliation efforts are underway for the period between July 2006 and January 2013 • Cash Remediation Phase II continues where Phase 1 left off. It will result in the expedient realization of the below project outcomes and benefits. Primary Cash Remediation Phase II Project Outcomes and Benefits Near-term realization of dramatically improved accounting processes for the State in the areas of Payment processes, Cash Control processes and General Ledger processes Implementation of compliance requirements related to audit findings Achieving these business results within the next 10 months Setting the stage for a successful SHARE upgrade