20 Survey Results 24 States Responded Self Grade - Ability to deliver timely, useful financial reports to management 71% - budget reductions have had an impact on their ability to support financial reporting requirements and demand.
21 Survey Results - Timing 75 percent of the states note that it takes four to six months to complete and finalize the CAFR None of the states surveyed can complete the report in three months or less. However, two thirds of states note that they would like to complete and finalize the CAFR in fewer than 120 days. Is the bottleneck component units? Systems? Necessity?
22 Survey Results – Efficiency 33 % - CAFR process is extremely or somewhat inefficient 4% - four percent say that CAFR generation is completely automated. 71% - percent of the states noted that 25 percent to 50 percent of their financial staffs time is spent on moving data or maintaining in-house developed routines to support the financial consolidation and reporting process. States are acting!
23 Survey Results – Data Analysis 25% - Of states surveyed note that inefficient manual processes pose the biggest challenge for analyzing data 25% - Not able to gain sufficient insight from their data and make use of it to drive actions or contribute to overall performance improvements 21% - Say their challenges divert time, money and resources from citizen programs or make it difficult to get timely information to managers who make decisions about funding and planning for these programs
24 Charting a Path Examine current processes – define and develop organization-wide priorities and strategies that include information architecture and transition timelines Evaluate technology options – choose flexible financial management technology tools that enable states to start small and add new functionality when they need it Open doors – select open, standards-based solutions that enable integration between disparate systems and data sources Think analytically – invest in business intelligence solutions that provide financial managers with the timely information they need to make more effective decisions Partner for success – work with trusted technology providers that can help define information management strategies and architecture requirements to capture, secure, analyze, use and share data effectively and in real-time across the organization
26 100% Custom – Fortran/Cobol – Punch Cards, COTS? ERP? What s That? A Brief History of Business Applications 1970s 1980s 1990s 2000s… Internal (MIS only) – Mysterious people In cold rooms behind closed doors. Mainframe rules. First COTS/ERP Apps (GL/AP) but still mostly custom – End user terminals (green screen) appear Internal (MIS with some end user access.) Mainframe still rules but Mid range (and yes the PC) appears. ERP grows – Many more applications – PC/Client Server gives birth to Super User COTS takes the lead. Y2k a major driver Departmental – MIS no longer rules. Business users gain. Still Internally focused to organization Internet changes everything – Tremendous productivity gains/cost savings. Data for analysis, not just record keeping. Transparency is a major requirement. External Focus – Move outside Organization. Citizens, clients, vendors have access FOCUS
27 COTS – Commercial Off the Shelf Software SystemsIssues Old custom systems still around – UI systems average 22 years old (NASWA) – MMIS, Tax, some ERP 10+ years old Even 10 year old system not architected for external access Expensive to maintain Nearly Impossible to upgrade Excel Budgeting Fed/Special Reporting CAFR Multiple versions of the truth Hidden effort is still costly Multiple data handoffs Audit issues Vendors and customers have moved aggressively to replace Custom applications with Off the Shelf ones!
29 Performance Management ensures public funds are effectively used Budgeting and Planning provides control and insight Reporting provides accurate and timely feedback. Elements of Public Transparency Solutions Reporting Public Transparency Performance Management Budgeting and Planning
30 Transparency Groundswell – All 50 states have transparency sites – Quality/comprehensiveness varies Following the Money 2011 – US Public Interest Research Group 2011 PIRG Report Online Access to Government Spending Data
31 Transparency Major Changes in Grades 2010 to 2012 Following the Money 2012 – US Public Interest Research Group 2012 PIRG Report Online Access to Government Spending Data
32 Transparency Following the Money 2012 – US Public Interest Research Group Major Changes in Grades 2010 to 2012
33 Define Transparency? 10 Criteria Goal – More than exposure Ratings for States, Cities, Counties, K12 Oracle Whitepaper: Transparency in the Public Sector: Its Importance and How Oracle Supports Governments Efforts
34 PeopleSoft ERP, Business Intelligence Award winning A rated transparency website Direct data update to website from source Wide range of public information Solutions Transparency Case Study Example State of Indiana
35 Transparency Case Study Example State of Indiana Contract Search
38 Local Government Technology Priorities Center for Digital Government – State and Local IT Trends 2012 Performance management and reporting Transparency ERP – Replacement, implementation, extension and upgrades Legacy Modernization – ERP and Tax Systems Document/Records Management and content management and workflow
39 Oracle EPM Overview Automates and links strategic/financial management processes Modular and integrated Integrates data from multiple transaction systems Fast time to value; Low TCO Integrated Performance Management Suite Oracle BI Foundation Common Information Model Performance Management Financial Close & Reporting Budget Formulation & Execution Revenue Analysis & Cost Management Tax & Revenue Case Management Operational Systems Student Systems
40 Performance Management Applications Integrated Suite of Best-of-Breed Modules Integrated Agency Planning Financial Reporting & ComplianceCost Management Performance Scorecard Revenue Analysis and Cost Management Clearly articulate strategy & goals, communicate them across the enterprise Develop scorecards leveraging recognized methodologies and industry benchmarks Ensure accurate forecasts, shorten budgeting & planning cycles, and model the potential impact of workforce & capital spending decisions Conduct cost analysis using robust modeling and analysis with integrated drill down Visibility into cost and revenue drivers through traceability maps Close and report financial results, meet regulatory requirements, reduce compliance costs and improve confidence in the numbers Strategy Management Strategic Finance Capital Expense Planning Public Sector Budgeting and Planning Financial Data Quality Management Financial Management
41 Hyperion Financial Management Accelerates Reporting Cycles and Reduces Costs of Compliance Patented financial consolidation and reporting features Complete audit trails, workflow and validations Smart Dimensionality Flexible what if scenario management features Powerful, reporting and analysis tools Full integration with ERP and other transaction systems Easy to customize and extend Web-architected
42 Reliable Financial Reporting Improve Timeliness and Usefulness of Information DailyMonthly Quarterly Yearly Rapidly Aggregate Financial Information Across Different Entities Provide Visibility Across All Department / Management Levels Ensure Role-Based Security at Every Level Internal Reporting for Operational Management and Improvement External Reporting for Submission to Overseeing Agencies Departments Agencies Budget Officers Program Managers / Officers
44 Link Hyperion to Source Applications Hyperion Financial Management/Planning Oracle Account Analysis and Drill-Down Hyperion Financial Data Quality Management EPM System Release 11
45 Visual Flow of Calculation EPM Calculation Manager Unified Environment for EPM Business Rules
46 Oracle Hyperion Strategic Finance Strategic Agency Funding & Out-Year Financial Modeling Define Funding Options Link Priorities to Out-Year needs Analyze trail feature Freestyle reporting What If analysis toolkit
47 Taking Simulation to the Next Level: Understanding Risk and Uncertainty 1.Model – Specify the range of input assumptions – Simulate possible outcomes (Monte Carlo) 2.Quantify – Range and likelihood of outcomes – Relative importance of input assumptions 3.Decide – Focus on what matters – Prioritize the outcomes by balancing risk and reward
48 Decision Workflows – Financial Analytics Business Function Finance / Budget Role Director – Finance Manager - Department Objectives –Monitor budget utilization –Control risk of payables portfolio Target procurement efforts for more effective spending Drill to invoice detail Which payables items are involved? Is it based on supplier spend? Which departments are accountable? Are expenses on target? Execute to Budget Plan Drill to HR Analytics When were the expenses incurred? Is it based on overtime compensation? Is revenue on target? Business Objectives/ Issues Gain Insights Take Action
49 Decision Workflows – Financial Analytics Target procurement efforts for more effective spending Is it based on supplier spend? Execute to Budget Plan Drill to Detail Business Objectives/ Issues Gain Insights Take Action Who are the suppliers? Drill to invoice detail Which departments are accountable? Are expenses on target?
Hyperion in Georgia August 13, 2012 Hyperion in Georgia August 13, 2012
Page 52 Agenda History of Reporting in Georgia Hyperion Financial Management (HFM) Overview Benefits Project Highlights Overview of HFM Hyperion Dimensions Data Loads Rules Financial Reporting Sample Reports Q&A
Page 53 History of Reporting Georgia produces 5 main financial reports annually Comprehensive Annual Financial Report (CAFR) Budgetary Compliance Report (BCR) Selected Summary Financial Information (Treasury Operations) Single Audit Report (SAR*) Section 1512 Reporting (produced quarterly) (ARRA*) For FY2010 & FY2011 reporting Hyperion was used for the CAFR, BCR and Treasury Operations. SAR and ARRA have not been migrated to Hyperion.
Page 54 History of Reporting 50 organizations are reported in the BCR Approximately 350 trial balances (comprised of ~130 organizations) are reported in the CAFR ~ 45 of the organizations reported in the CAFR are on a common ledger system (PeopleSoft). PeopleSoft primarily maintains ledgers on a statutory (budget) basis and is converted to GAAP reporting is collected through year-end forms. SAO utilizes the data on the year-end forms and other sources to post conversion entries in HFM. Data is also gathered from CPA audited financial statements for some organizations included in the CAFR.
Page 55 Challenges with Legacy System Time CAFR and BCR were not consistently being issued by required 12/31 deadline Cost Create separate import files for each organization Manually map each line of T/B to the applicable reporting line Consolidation of various reporting levels could take hours and the system (Caseware) often crashed prior to completion. Manually enter information collected in year-end forms to consolidate and prepare the notes Manually close out revenue/expense Quality Difficult to analyze data across funds (i.e., cash for a single entity)
Page 56 Solution: Hyperion Web based application Accessible by users in multiple locations State Owned and Operated SAO owns both the results and the system Minimal to no IT support required Packaged Application Out-of-the-box financial intelligence – minimal ongoing consulting Drill-back capability Allows for drill-back to source system data Microsoft Office Add-In (SmartView) Allows users to retrieve data from and submit data to Excel
Page 58 Benefits of HFM Reduce cycle time Automate data load for agencies using statewide accounting system (PeopleSoft) with the use of FDM Automate journal entries, where possible Ability to post journal entries across multiple agencies Allocation of investment pool holdings Remove encumbrances in conversion from Budget Fund to General Fund Lease and capital asset / accumulated depreciation entries Data forms and Excel SmartView spreadsheet upload tools allow for input of additional data Trial balance for non-PeopleSoft users loaded via SmartView Supplemental data used for the NTFS (i.e., Capital Asset changes and debt service to maturity details)
Page 59 Benefits of HFM Improve Quality Standardized mapping for common G/L users and ability to load data in a single upload file Reduced load time provides additional time to analyze data Data can be reviewed across organizations and fund types from a single system Ability to more efficiently analyze year over year trends and provide support for MD&A analysis Flexibility Easy to create and modify excel files to retrieve data from HFM using SmartView No limit to the number of Excel SmartView files
Page 60 Project Highlights Entire timeline took less than 6 months to complete Used a consulting firm to assist with application setup SmartView functionality made it easy to convert write-up files from prior system to Hyperion links Created rules in HFM thereby reducing the number of AJEs required Created supplemental data accounts to track dates received and applicability status of year-end forms Utilized an Excel JE template to upload journals to HFM (maximum of 5K lines long)
Page 61 Reporting Examples of Reports in FASTR/SmartView Trial Balance BCR and CAFR Statements Journal Entry Report Hyperion Financial Reporting Studio report template will be created to support report production
Page 62 Sample BCR (SmartView version)
Page 63 Sample CAFR (SmartView version)
Page 64 Test Case Day before CAFR is to be released Material Error to Beginning Capital Asset amount for Discretely Presented Component Unit What do I need to do? Enter AJE Enter Supplemental Data Consolidate Data Click Refresh with Smartview files and statements, NTFS, MD&A, check files, and analytics Done! All changes are done
65 Additional Resources Report: Shifting Gears: Manual to Automatic- Statewide Financial Reporting and Performance Data AnalysisShifting Gears: Manual to Automatic- Statewide Financial Reporting and Performance Data Analysis On Demand Webcast: Reduce the Time, Cost and Complexity of Financial ReportReduce the Time, Cost and Complexity of Financial Report Resource Center: Public Sector Enterprise Performance Management*Public Sector Enterprise Performance Management *Note: To access the Resource Center, Enter one of the following case sensitive tokens: Federal: FEDQ22013 or State & Local: SLQ22013
66 Questions? Moderator: R. Kinney Poynter Executive Director NASACT Robert Sabo Executive Director Public Sector Solutions Oracle Keith Johnson Director State and Local Government Oracle Alan Skelton State Accounting Officer Georgia