Illinois Comptroller: How to Turn Around an Administrative System on the Brink of Crisis

When Illinois Comptroller Loleta Didrickson entered office two years ago she faced a situation about to implode. Not a fiscal one but a dead-end computer platform and archaic accounting procedures that threatened to stymie management of the state's $35 billion budget.

"It was a pending crisis " Didrickson said. "There was no accountability there was tremendous concern about control and [there was] a system that could crash at any point in time. And we had 85 separate accounting systems across state government-none of them online to me-and I paid all the bills."

But within 13 months the Illinois Office of the Comptroller (IOC) has moved from a laggard to a leader in state governments' use of technology with an information systems strategy that observers liken more to corporate America than to government. Today the IOC has a new mainframe that runs mostly off-the-shelf software to automate the tracking of revenues expenditures and the millions of payments it processes each year. The bottom line: a projected cost reduction from $57.50 to $3 per transaction once all the pieces are in place.

At same time the system solves the looming Year 2000 date-change problem and provides a World Wide Web-based information warehouse that puts fiscal information at the fingertips of legislators and their constituents. The new IOC system went live July 1-the start of the fiscal year-on time and within budget.

But it is just the beginning. The daunting task at hand is Didrickson's ambitious plan to consolidate all 85 state accounting systems. The hope is that a proven system at the IOC will help induce other agencies to update and integrate their systems and in doing so generate savings that Didrickson argues could be funneled into more visible projects in areas such as education and criminal justice.

The Problem

The IOC's old accounting system relied on a circa-1974 Unisys Corp. mainframe and many tasks were still handled manually. Unisys planned to stop supporting the platform in April 1997 and replacement parts had already become dangerously scarce. The office was spending $1.1 million a year for three technicians to stand by in case of a system crash. All that and the mainframe did not even house a central database or a general ledger program so checks were still processed and stuck into envelopes by hand.

Amazingly $5 billion in annual Medicaid payments were being tabulated by teams with legal pads. "I could not believe it " Didrickson said. "It was all manual with adding machines and hen scratches on a clipboard."Even the state's annual financial report took eight months to produce making informed decisions difficult. "The information was never useful " she said. "The governor had already prepared his budget message for the following year without even knowing what had happened the previous year."

Separately the IOC was grappling with 60 000 requests each year for information from inside and outside the agency. It could take weeks to manually pull the information needed to fulfill some requests from legislators creating reports news media on deadline or curious taxpayers.

Comptroller's Strategy

Didrickson hired Deloitte & Touche and other experts to study the situation and validate her position that an overhaul was necessary. They found unnecessary duplication of efforts across agencies and outmoded systems throughout the state. They came up with a compelling financial projection to support a statewide financial systems consolidation: one-time savings of $125 million followed by $25 million savings each year thereafter.

Didrickson then put forth a proposal to fund the statewide overhaul but the plan was shot down in the state legislature. Undaunted Didrickson came up with another plan. Her requirements were three-fold: a Year 2000-compliant financial management system a platform for electronic commerce to get rid of paper-driven payment processes and an information warehouse to handle the information inquiries.

That includes $8.1 million for American Management Systems Inc. the Fairfax Va. systems integrator selected in May 1996 for the project. After narrowing down its choices to AMS or KPMG Peat Marwick LLP the comptroller chose AMS because 1) the company had pre-packaged financial software that solved the Year 2000 glitch 2) the software was used by 18 states 3) it provided a platform for electronic data interchange (EDI) 4) AMS proposed the only Web solution for the information warehouse and 5) AMS promised to deliver everything within an aggressive schedule.

Financial System Technology

The so-called Statewide Accounting Management System (SAMS) is based on AMS Advantage 2000 financial management software running on a new IBM Corp. mainframe and existing PC clients in the comptroller's office. Distrustful of client/server computing to handle the volume Didrickson chose a mainframe platform that would interoperate easily with the IBM mainframe already used by Illinois' statewide data center.

AMS selected an IBM VSAM database to handle SAMS. "Some might consider it older technology but part of the driving force in choosing that is because of the reduced risk for high-volume processing " said Rob Chin a senior principal at AMS. "We reduced risk on one half of the project so we can focus in on the riskier parts of the project the data warehouse and Web application."

AMS developed a real-time software interface to interact with an existing IBM AS/400 that handles latter stages of payment processing and the legacy Unisys mainframe until it is no longer needed this September. The comptroller's office had spent two years entering local government information into a Microsoft Corp. Access database which eased importing data into the new database. The new system interface still displays just the last two digits of a given year but handles the full four digits internally.

In the past if an agency's financial information came in on tape the IOC reduced it to paper for pre-audit functions rekeyed it into the system and ultimately stuffed checks into envelopes. Didrickson has yet to calculate savings figures for the new comptroller's system alone "but I can do 7 000 warrants automatically in an hour vs. 15 000 hand-stuffed a day and there's tremendous savings there " she said.The system already has allowed the OIC to get rid of more than 30 percent of its paper. Didrickson expects the remaining 70 percent to disappear by next summer once EDI is implemented.

Web-Based Information Warehouse

For security and performance reasons AMS chose to separate the information warehouse from SAMS on the same mainframe. Called linc.net the warehouse uses an IBM DB2 database holds the last two years of fiscal information and is updated daily via custom software to match the SAMS database.

Anyone with an Internet browser can access an array of state fiscal information by pointing their browsers to www.comptroller.

state.il.us. A group of 25 IOC PCs will be given direct access to linc.net via Microsoft Access. Eventually AMS expects to roll out that capability to more than 300 PCs. "With a browser they are canned queries. But with Access users can create their own ad hoc queries on the fly " said Terry Graham an AMS principal.

For standard Web access AMS used a Microsoft Internet Information Server running Allaire Corp.'s Cold Fusion Web querying tool. (linc.net is protected with a firewall server running Check Point Software's Firewall-1.)

"With linc.net if I want to know what the legal expenditures of the Department of Social Services were during a month or year I can find out without wading through 16 or 18 pages of reports that may be a month old " said AMS vice president Caroline Rapking.

Linc.net also provides the state's vendors a mechanism to monitor the status of their checks. "There's been virtually no way to get information in the past " said David Stover executive director of the Illinois Association of Rehabilitation Facilities Springfield Ill. "The agencies I represent operate paycheck to paycheck. Not getting their check in a timely way can be devastating. The new system will allow us to track those payments much more closely and that's going to do a great deal to eliminate the fear that many of our bankers have."

The improved functionality has obviously had a big impact. The comptroller's Web site had more than 1 000 hits per day before launching linc.net within a week it averaged 10 000 a day said Andrew Peterson special projects assistant in the comptroller's office.

"This warehouse really gives citizens the opportunity for the first time to go inside their state government and come to understand it better " said Jim Nowlan senior fellow with the Institute of Government and Public Affairs at the University of Illinois in Urbana. "This should be just the beginning for a site that could include all the activities of state government. I would hope the Revenue Department and all 35 agencies within the governor's domain would put all sorts of information on there."

The Challenge

There is still the issue of getting a buy-in from other agencies to make SAMS truly statewide. Didrickson is still pressing from the top working closely with the governor and legislators to change their thinking. "Since you don't have to make a profit or pay taxes and no one is going to put you out of business government just lopes along " Didrickson said. "And no one ever really pushed government to change the way they do business."

Her team also has its work cut out for it at agencies satisfied with the status quo. "We don't really have any plans to connect into it any differently than the way we've been connecting into their system for the last 20 years " said David Wood general counsel for the Illinois Bureau of the Budget. "We've always been able to call them up and get them to do things for us. So it's unclear at this point how much better it will be. I'm not downplaying the need for them to do this it's just that our accessing of the data won't change much."

But there have been successes. Didrickson was able to persuade 11 agency representatives to work with the comptroller's office during development. "I think it's important that the systems do integrate to eliminate as much duplication of effort as possible " said Howard Peters secretary of the Illinois Department of Human Services. "And as we move accounting systems into the 21st century we'll be able to do paperless transfers which will save taxpayer dollars and create a better ability to monitor and audit some of the transactions."

The Future

The big payoff is in expected mid-1998 when EDI will take over the office's 17 million annual payments. No decision has been made about how they will implement EDI and request for proposals will go out this month to select a new banking partner. On this front Didrickson is getting help from legislature. "We've passed two bills-electronic vouchering and electronic signature-that set the platform to be truly electronic from procurement to payment " she said.

The comptroller's overall solution is a good example of where government needs to go to rethink processes and opt for pre-packaged solutions rather than rewrite code said Linda Cohen research director for Gartner Group Stamford Conn.

"Government is accustomed to a total customized solution and that has to change " she said. "We are trying to encourage government to buy partially built systems so they are cheaper and faster to implement. Now they won't get 100 percent of what they want but the chances are pretty good that the vendor's template works better. The reality is vendors are solving these problems every day."

Jane Morrissey is a free-lance writer based in Denver. She can be reached at jemorrissey@msn.com.