Information Technology (IT) Expenditure Coding
What DOES the state spend on Information Technology?
Interest continues to mount when it comes to capturing better information about WA State’s IT expenditures. In response to this growing interest, OFM will implement new coding requirements for IT costs effective July 1, 2010.
Meeting the objective of obtaining useful cost detail about IT expenditures in the state is both a complex and dynamic process. Our plan focuses on making foundational changes that can be implemented in the short term while continuing to identify value-added changes that can be implemented in an incremental fashion in the future.
In the 2007-2009 Biennium, OFM worked with several agencies and proposed a new IT coding structure and developed a set of IT coding requirements with the goal of providing a clearer picture of IT costs in the state. You may recall that the proposed solution employed the use of the Project Type coding structure in AFRS. It set up two project types:
X for IT Acquisitions/New Development, and
Y for IT Maintenance & Operations (M&O)
Both require the use of AFRS Project Coding on all IT expenditures.
Your help is critical in getting the IT Cost definitions right (or right enough) so we can begin to capture this information in the state’s accounting system. Our primary objectives are usefulness, high quality, comparability, simplicity and low cost of data collection.
Draft IT costs questions and definitions were circulated among agency CIOs and Fiscal Officers for input. Their feedback was addressed and where applicable incorporated into revised documents for their review.
We then met with a large group of CIOs, CFOs and other stakeholders on March 29, 2010 to discuss our methodology, changes to documents and gain feedback on three key questions related to accounting IT definitions:
What counts as an IT cost?
How do you decide if an IT cost fits into the Acquisitions/New Development category or the Maintenance and Operations category?
Do any of the subobject definitions in SAAM need to be clarified to better support the consistent capture of IT expenditures?
The meeting exchange was beneficial and guided the direction for further changes to the IT Costs model.
Time is Short - What's Next?
OFM will meet with key stakeholders in April to further refine IT cost areas requiring further clarification. Once these meetings are held, the IT Cost model for Accounting will be finalized and implemented with an effective date of July 1, 2010.
The IT costs initiative is not limited to OFM Accounting. It is a three-pronged effort driven by the OFM Accounting Division, the OFM Budget Division, and the DIS Portfolio Team. In the future, the OFM Budget Division will address IT Costs as part of the biennial budget instructions, and DIS will address IT Costs via the Portfolio process.
We will continue to work together as much as possible to limit the impact to state agencies. We want the process to be seamless. In the end, we want the IT coding model to match the budget and portfolio instructions thereby eliminating duplication of effort and ensuring consistency.
We recognize this initial effort is not perfect, and will not meet all our needs. However, it is an excellent beginning and will demonstrate to others that we are committed to clarity and consistency when identifying what the state spends on IT.
If you have questions, please contact Bruce Gorsky at 360-725-0221 / Bruce.Gorsky@ofm.wa.gov.
About the Roadmap: Positioning the State for the Future
In today’s business environment, Washington State agencies are finding that many of their existing financial and administrative policies and processes no longer meet the demands of citizens, the Governor and the Legislature. Expectations for clarity and transparency in government are hindered by outdated back-office policies and business practices, and the tools and systems supporting them.
Citizens deserve to know how their taxpayer dollars are being spent and for what results. That’s where the Roadmap program comes in.
The Roadmap looks across state government to:
Identify and implement initiatives that streamline business policies and processes;
Make state government more flexible, transparent and responsive;
Meet demands for better information; and
Better leverage the state’s investment in information systems.
To do so, the Roadmap must weigh the needs of the state as an enterprise over the needs of single agencies, or even functionally related agencies.
Washington stands at a crossroad where every state agency faces real and urgent business needs and risks. We can choose to stay with the status quo – allowing agencies to continue investing in unique solutions that divert time, resources and energy from enterprise solutions. Or, Washington State government can lead the way by providing enterprise tools that benefit all agencies.
In the past, Washington State has taken a decentralized governance approach. For example:
Many laws, policies, processes, organizations, systems and data support agency-unique missions and initiatives; and
Minimal enterprise requirements provide agencies with flexibility.
However, we are also exploring the benefits of an enterprise approach to achieve:
Better information, better decisions, better results;
More efficient and effective government;
Better customer and business relationships; and
Optimized return on investment.
As we explore enterprise options we will clarify where a specialized approach is absolutely needed.