ERP Coding Block and Chart of Accounts Discussion January 9, 2014 DRAFT
Coding Block and Chart of Accounts 1 When the State implements a new ERP system (starting this summer), the coding block and chart of accounts will quickly be a major focus. The reasons for this are varied, but include: • The coding block of the new ERP will be different (and probably smaller) • Standardization of coding block usage is an explicit goal of the project • Much of the work must happen in the first phase of the project (Budget Prep) • The work required to do this will be extensive and will require significant agency participation. There will not be one mapping of the old to new coding block. Effectively, there will be one for each agency. 2 The work actually needs to start now. • To analyze the coding blocks of proposed ERP solutions and ensure that the selected package can accommodate the State’s needs • To begin the process of cleaning up and standardizing funds and other chart values that may take longer than will be available once the project starts. 3 But even if we get started now, there will be a lot of work to do once the project starts. With such a diverse use of the current coding block extra effort will be needed in design, conversion, interfaces with legacy systems, reporting, and testing. 4 The new chart of accounts, conversion mapping, changes to legacy systems, training, and other related areas will be the responsibility of the State. The selected Implementation firm will only assist. DRAFT
Understanding the Challenge Agency differences in: Transaction volume Usage of different coding block elements How specific elements are defined for agency usage Number of data element values Expected area of impact DRAFT
Percent of R*STARS Transaction Volume by Agency Size Percent of R*STARS User Count by Agency Size (by transaction volume) Percent Largest 7 Agencies 70. 95 % Smallest 25 Agencies Middle 18 Agencies Smallest 25 Agencies 34. 66% 24. 05% Middle 18 Agencies 30. 79% Largest 7 Agencies 34. 55% 5. 0% Key Points 1. Most of the transaction volume is concentrated in the 7 largest of the accounting agencies currently established in R*STARS. These agencies will require the most features, are more likely to require customization, and will have the most significant coding block mapping, reporting, conversion, and interface efforts. 2. However, user counts are much more evenly distributed across agencies. The smaller agencies will still have a significant training audience, but will not need to be as heavily involved in analysis, design, and selected other project task areas. DRAFT
Key Points Percent of R*STARS Transaction Volume by Type However, over 90 percent of those transactions were not manually entered to R*STARS. They were automatically posted via interfaces, system, or EDI processes. 3. Only 10 percent (about 1. 6 million) of R*STARS transactions were entered manually. 4. Percent The State processed over 16 million R*STARS transactions in the FYE 9 -30 -2013 2. The mix of transactions that were manually entered differs from that for the overall transaction set. Those used manually should receive greater emphasis in designing, the user interface, writing desk procedures, and in focusing training efforts. 81. 15 % . 21% EDI DRAFT 1. 8. 64% System 10. 01% User Interface
34. 00 Key Points Percent of Total Transactions by Doc Type (FYE 9 -30 -2012) 1. 2. The remaining 416 Doc Types accounted for less than 16 percent of all transactions. 4. There was extensive variation in use of Doc Types. 5. Broadly, approximately 50 percent of all transactions related to payment vouchers/payment request 6. Approximately 25 percent involved cash/deposit/revenue reclassification or transfer. 7. Percent But 10 Doc Types accounts for more than 84 percent of all transactions 3. 19. 81 State used 426 Doc Types Going forward, the State will need to consolidate doc/transaction types into a base set of approximately 30 types. 15. 62 10. 22 5. 54 4. 12 2. 99 3. 24 2. 40 1. 01 ZZ DRAFT 1. 05 GR GS GA cc V 2 ZY WZ GB VZ Remaining 416 Doc Types
Frequency of Use for Selected Elements on R*STARS Transactions 97% 97% Percent 94% 56% 48% 36% 33% 28% 25% 20% 12% 1% ACD 1 Agencies Using 9 ACD 2 ACD 3 Grant 5 9 14 Project 19 MPC 17 Mapping Issue affects conversion, reporting, interfaces, agency budgeting, DRAFT Agency Function Program Agency Index GL Object 26 34 40 36 Likely affected by COA Standardization 40 PCA 40 RTI 37 Coding Reduction – Change Issue
Military VA 71% DEQ 66% DOE 62% DHD 91% Senate 70% DOE 61% DHS 98% DAG 98% LARA 94% DOE 98% SFA 96% DCH 86% DEQ 97% DNR 96% DOT 96% DCH 73% DEQ 71% DHS 100% DCH 86% Key Points ACD 1 ACD 2 DTMB (M&B) 58% ACD 3 Grant Project MPC RTI High volume agency that uses all or most of the coding block Mid range volume agency with moderate use of the coding block Mid range volume agency with extensive use of the coding block Low volume agencies without extensive use of the coding block DRAFT 1. Elements with lowest frequency use overall are heavily used by certain agencies. 2. Certain of the lower use elements are used on all or nearly all transactions for particular agencies. They are also used in agency budgeting and billing processes. 3. DOE 62% Percent Three largest agency users of selected elements Some of these agencies use all or nearly all of the current coding block elements and will have the greatest challenge in coding block mapping, data conversion, and reporting.
Michigan Agencies by Transaction Volume and Extent of Coding Block Usage 2 Million 1 Million 800 K 500 K Agencies in Shaded Area • 92% of all transactions • 71% of all users • 96% of all grant transactions • 94%of all project transactions • 82 % of all defined cost accounting elements • 67. 2 percent of all fund codes • 89. 8 % of all organization codes • 98% of all ACD 1 transactions • 100% of all ACD 2 transactions • 99% of all ACD 3 transactions • 98% of all agency budget lines • 48 of 63 agency systems to be replaced • 157 out of 190 interfaces Human Services Transportation Corrections Treasury Under 100 K Agency Transaction Volume Auditor General Business One Stop DMB – Payroll DMB – OFM Higher Education Grant House Fiscal Agency House of Representatives Judiciary Legislative Service Bureau Lottery Senate Fiscal Agency Unpresented/Undelivered Warrant Use of Coding Block DRAFT No Use of Cost Accounting or Agency Objects Civil Service Commission Civil Rights Colleges and Universities Executive Office Legislative Retirement Education DTMB Consolidated State Police Strategic Fund Agency Housing Development Agriculture Community Health Natural Resources Environmental Quality LARA Military & Vet Affairs DTMB - M&B DTMB - IT Highest level of coding block mapping, reporting, and training issues State Building Authority College/University –Capital DTMB Capital Outlay Casino Gaming Board Attorney General Likely Conversion Issues No Use of Cost Accounting Uses Agency Objects Uses Projects and/or Grants and Agency Objects Uses only one ACD field and Agency Objects Uses all or nearly all Elements
Many Project Challenges are Concentrated in a Few Large Agencies Transportation High Volume Extensive Use of Coding Block High Number of Cost Accounting Element Values High Variation in Use of ACD 1, 2, and 3 Overload of Grant and Index Extensive Project and Grant Related Data Conversion Extensive Chart Impact on Interfaces Extensive Chart Impact on Reporting Extensive Training Impact DRAFT Environmental Quality 2. 299 million 1. 053 million All elements 17000 All elements 4083 Community Health 1. 943 million All elements 2741 Human Services LARA 2. 581 million. 658 million All but ACD 3 All but ACD 1 2031 1964 Natural Resources 1. 443 million All but Function 2902
Diversity of Meaning and Use Example Agency Processes Using Codes Selected Agencies Code Using Example Agency Uses Expense Classification ACD 1 9 • • Employee Time Activity for DCDS CMS 64 Medicare/Medicaid Services Subsections of Federal Grant Specific characteristics of cleanup sites Groupings of projects Planning bureau activity Equipment ACD 2 5 • • • Project spending by PCA Link to CHAMPS data Division level activity RRD locations Project activity for billing Maintenance activity ACD 3 9 • • IT , Motor Pool and Vehicle DTMB Costs Track CHAMPS spending County ID Location code Traffic signal number Balance sheet category Maintenance activity Grants 14 Grants and Phases Matching programs Superfund contracts Court Cases Roads, structures, pump houses Equipment CDFA numbers Group projects Projects 19 • • • DRAFT • • Projects Federal grant projects Appropriation Conferences Multiple Grants Storage Tanks Revenue Classification Project/Grant Billing Budget External Reporting
Impact of New Coding Block and Standardization Unique Element Values Element Fund Program Org APPN COBJ Total 2774 5, 363 6, 688 2, 444 4, 149 AOBJ Index PCA RTI 6, 865 15, 579 15, 689 608 Project Grant ACD 1 ACD 2 ACD 3 MPF 20, 249 5, 635 1, 279 508 1, 465 1, 434, 534 Most likely to be affected by standardization effort Most likely to not have exact equivalents in new system coding block Overloaded with multiple and diverse uses. Mapping, conversion, reporting, training issues expected Contains program, organization, facility, accounts, special purpose conversion funds from 1994, funding source, and lots of other things that need DRAFT not be a fund.
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