1. Pennsylvania Government Reform
Anna Maria Kiehl, CPA
Comptroller /Chief Accounting Officer,
Office of Budget, Comptroller Operations

2. Commonwealth of Pennsylvania Financial Organization Structure
Appointed by Executive Deputy Secretary of the Budget
Appointed by Secretary of Budget
Appointed by Governor
Elected Official
Governor
Secretary of Budget
Executive Deputy Secretary of the Budget
Comptroller
Director of Budget
Auditor General
Treasurer 2

3. Governor Tom Corbett’s
Reform Initiatives
Performance-based Budgeting and a Biennial Budget Cycle
Transparency in State Government
Consolidation of Services
Reducing the Size of Government
Privatization opportunities, e.g., state-owned wine and spirit stores
Operational efficiencies – Travel Policy revisions/Out of State Travel restrictions, Management Salary Freezes, Vehicle Policy revisions
Pension reform
Welfare Reform
Salary Freeze and Out of State Travel restrictions
Focus on Consolidations and Reform within and across state agencies
Task Force forming to review privatization opportunities, i.e., LCB, print shop, fleet cars
Tighter Travel policy and state-assigned vehicles policy
Introduction of Performance-based Budgeting
Passed legislation requiring a searchable, on-line database for the public
Enhanced Accountability and Transparency - Passed legislation requiring a searchable, on-line database for the public

4. PA’s Ten Years of Continuous Improvements
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ImaginePA - SAP
Budget, Finance, Procurement, Reporting – (Start - March 2001)
HR, Payroll (Start – March 2001)
Go Live 3 Phases between July 2002 and January 2003
Go Live January 2004
SRM
(Start - February 2006)
Procurement Upgrade March 2007
EBP Upgrade August 2006
XML Go Live July 2007
Go Live Training November 2007
Revenue Initiative
(Start - Within OB 2006)
Agency Kick Off June 2007
Reporting July 2008
Finance Transformation
(Start - February 2008)
Scheduled Go Live – May 2009
Go Live
May and June 2009
SAP Budget Control system
(October June 2010)
Go Live
July 2010

5. Comptroller Operations before transformation
Inflexible Organizational Structure
The Office of the Budget had two bureaus and five comptroller offices providing accounting and payment services.
Offices were aligned around agencies rather than business processes.
This inefficient structure resulted in higher operating costs and payment delays.
Inefficient, Costly Processes
Nonstandard processes and procedures in each office and bureau
Frequent non-value-added handoffs of paper documents
Labor-intensive effort, often resulting in delayed payments to vendors
Duplicate scanning performed in Comptroller Operations and Treasury Department
Paper, Paper and MORE Paper!
Paper invoices sent to hundreds of different locations across the state for processing
Thousands of paper documents stored in filing cabinets
Excessive annual mailing costs associated with transporting paper documents
No visibility of invoice status
Inflexible Organizational Structure
The Office of the Budget had two bureaus and five comptroller offices providing accounting and payment services.
Offices were aligned around agencies rather than business processes.
This inefficient structure resulted in higher operating costs and payment delays.
Inefficient, Costly Processes
Nonstandard processes and procedures in each office and bureau
Frequent non-value-added handoffs of paper documents
Labor-intensive effort, often resulting in delayed payments to vendors
Duplicate scanning performed in Comptroller Operations and Treasury Department
Paper invoices sent to hundreds of different locations across the state for processing
Thousands of paper documents stored in filing cabinets
Excessive annual mailing costs associated with transporting paper documents
No visibility of invoice status

6. Finance Transformation Goals:
FASTER, BETTER,
CHEAPER!

7. Major Changes Occurred in Three Areas:
PEOPLE
Consolidated 535 staff members in a central location and organized them around function.
Implemented a centralized call center for state vendors, contractors and agency personnel.
Established a Workforce Development and Training Office to provide financial, accountability and audit training to all commonwealth employees.
Instituted a Quality Assurance function to assess and monitor the adequacy of internal controls, process design and performance metrics.

8. Major Changes Occurred in Three Areas:
TECHNOLOGY
Created centralized post office boxes for the receipt and scanning of invoices to reduce sorting and handling costs.
Integrated invoice images and electronic approval capabilities within the existing IT system for both purchase-order and non-purchase-order-related invoices.
Expanded the use of electronic invoicing with utility companies to reduce payment time and processing costs and receive rebates.
Employed electronic imaging of checks to expedite the recognition of commonwealth revenue, allowing for deposits to be synchronized with the financial reporting system.
Developed reports and dashboards to improve invoice lifecycle visibility and performance metrics.

9. Major Changes Occurred in Three Areas:
PROCESS
Developed a completely paperless procure-to-pay process.
Provided electronic real-time visibility of invoices.
Eliminated non-value-added handling of paper invoices and revenue documents.
Developed and documented standardized procedures for payables, revenue, accounting and auditing.
Streamlined approval processes by removing requirements for duplicate approvals.
Eliminated the printing of paper documents for certain revenue documents.
Developed a reporting solution for required Federal stimulus section 1512 reporting.
Formed an audit committee and implemented a risk-based audit approach to an annual, internal audit plan that is more aligned with the administration’s priorities.

10. … and realized significant benefits
Standardization of policies and procedures
Improved allocation of resources
Collocated staff for a more flexible organization and increased capacity
Maximized the existing integrated, ERP system.
New electronic invoice process
Identified areas for continuous process improvement/efficiencies
Improved coordination and communication within commonwealth agencies.
workflow technology

11. The Pennsylvania Office of Comptroller Operations
Budget
Secretary
Executive Deputy Secretary for Budget and CFO
Audit Committee
State Comptroller/
Chief Accounting Officer, Office of Comptroller Operations
Office of Workforce Development and Training
Bureau of Planning and Management
Bureau of Commonwealth Payroll Operations
Bureau of Liquor Control Board Services
Bureau of Commonwealth Accounting
Bureau of Payable Services
Bureau of Financial Management
Bureau of Quality Assurance
Bureau of Audits

12. Impressive Results in 24 Months
Invoice Processing
All processing is paperless and approvals handled electronically between agencies and the comptroller.
Scanned invoice images, contracts, purchase orders, and other supporting documentation are stored in a central repository for access by all agencies.
Invoices are paid in 30 days unless later pay dates are agreed on in advance.
Treasury Review
Treasury is no longer scanning invoice a second time, reducing their invoice review by 5-11 days.
Vendor Accountability
Vendor invoicing requirements were implemented for the first time in PA state government. Invoices are scanned within 24 hours and are presented to the State Treasurer on the average within 4-5 days of receipt.
Vendor Self service to register to do business and look up payment statuses is available. More than 95% of calls to the Vendor Service Center are answered.
Utility Billing
15,000 utility invoices are received electronically each year. Late charges and shut off notices are no longer received.
Elimination of “Paper Pushing”
Several paperless initiatives have been worked to eliminate printing, handling, mailing and time. Scanning is done one time and stored in a central repository for all agencies.
Human Resources
Doing more with less – consolidation of offices led to a reduction of positions through attrition.
Many professional positions were transitioned from civil service to non-civil service to enable management to get the right people in the right positions.
Accounting
Decentralized revenue accounting to recognize revenues sooner and implemented an Image Capture Letter process for the deposit of checks.
Auditing
State-wide internal audit function -mandated audits and enterprise-wide risk assessments. An audit committee also advises the Comptroller and audit director.

13. Finance Transformation Results

14. Finance Transformation Results

15. The Impact of Finance Transformation on Comptroller Operations

16. The Comptroller’s role in current Government Reform initiatives
Support of the Governor’s Transparency project – Penn Watch portal
Elimination of Travel Per Diems – system, process, and policy changes
Strengthening of Financial Policies and Management Controls
Support for Privatization of State-owned Wine & Spirit stores
Continuous Identification of Process and System Improvements
Collaboration with other agencies to save costs, eliminate redundancy & paper
Using Internal Audits and a statewide audit committee to focus audit resources
on risk
Expansion of Purchasing card and pursuing Vendor discounts