SABHRS Executive Council Meeting Minutes by liaoqinmei

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									                                         Enterprise Solutions Council
                                              Meeting Minutes
                                             December 18, 2003

Members or Designees Present:
      Darrell Zook, Chair, Department of Transportation
      Tony Herbert, Vice-Chair, Information Technology Services Division
      Steve Austin, Department of Revenue
      Barb Charlton, Department of Commerce
      Jane Hamman, Office of Budget & Program Planning
      Frieda Houser, Department of Agriculture
      Terry Johnson, Legislative Branch
      Mary LaFond (representing John Huth, State Auditor)
      Gale Kramlick, Office of Public Instruction
      Carleen Layne, Montana Arts Council
      Tom Livers, Department of Environmental Quality
      John McEwen, Department of Administration
      Cathy Muri, Department of Administration
      Sheryl Olson, Department of Administration
      Mick Robinson, Department of Public Health & Human Services
      Rhonda Schaffer, Department of Corrections
      Lisa Smith, Judicial Branch
      Lois Lebahn, Recorder, Administrative Support
Members Absent:
      Darrel Beaton, State Fund
      George Harris, Department of Livestock
      John Huth, State Auditor
      Rod Sundsted, Montana University System

Also present: Chuck Virag, Steve Bender, Linda Davis, Hank Voderberg, Department of Administration; Lloyd
Kilcrease, MDT; Karen Munro, Department of Justice; and Karen Revious, Department of Military Affairs

*Denotes motion(s)

Darrell Zook called the meeting to order at 9:05 am.

ESC website update- Demo - Tony Herbert
Tony presented a PowerPoint demonstration on the Website for the Council. (www.discoveringmontana.com/
itsd/policy/councils/esc)

Approval of Minutes from last SEC meeting – Darrell Zook
The minutes from the October SEC meeting were approved as written.

Old Business
ESC approval - Governor’s office, DOA - Steve Bender

Council members were appointed and the Governor’s office issued the executive order creating the ESC as a
Dept. of Administration advisory council. Since three council members will be retiring from state government,
Steve B. will follow-up on new replacement members. Retirees are Jane Hamman, John McEwen, and Tony
Herbert. The State Fund representative also will need to be replaced. Steve B. will contact Mark Barry and ask
what the State Fund interest is. Tammy Peterson offered to serve if needed. The tier will work with Steve B on
their decision.

Web forms- recap
Issue action form-format approval (Action Item) - Darrell Zook
MDT was going to submit an action item, but the way it is designed you cannot copy and send it. You need to
cut and paste it into a Word document. Then cut, paste and put it back. Our form will be revised so it is
customer friendly, can be filled out and shared. Action: A motion was made and seconded to accept the form in
concept. The council passed the motion unanimously.

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Issue action flow diagram and procedures-Discussion – All
Steve made changes to the Process for Approval of a Business Process Change diagram by incorporating
comments from the last meeting. The process was discussed again. The action form is prepared and the submit
button sends it automatically to Darrell, Tony and Steve by e-mail. One change is the addition of the business
process group. When an action item is received, the process owners will be notified so they can study it, reflect
and meet on it, and be prepared to present some initial recommendations when it is formally on the agenda.
Darrell, Tony and Steve discussed that Steve will be the de facto staff person for this council.

When Steve receives an item, and it is regarding the Department of Administration, he will rev up the process
owners and charge them to work on it. They will form an ad hoc team to study it. This will be an initial
refinement to understand what will be on their plate. It will go on the ESC agenda. If ESC votes to study it
further, the ESC will assign the item to a working group, which will develop the plan, do all the vetting of the
proposal and present one or more recommendations back to the ESC. The ESC can adopt, modify, shelve,
postpone or say no we aren’t interested in doing that.

When the ESC approves a plan, it will go to the executive committee and to the appropriate agency director(s).
Depending on the issue, ESC may send it to the Cabinet and other stakeholders for feedback and support. It
ultimately goes to the director and the CIO for approval to the extent that it is an IT issue and then the
implementation process will move forward.

Steve will become a team lead on a particular issue and work with the various agency representatives to define
that issue. The ESC will call upon other agencies for volunteer resources. Steve doesn’t want it to be perceived
that he is leading us as we go along. The Enterprise Solutions Council will come up with a solution and we as a
council will lead the process. Steve will be helping us in assigning the business process owners and making sure
he has the right resources and staff to be part of whatever group has to help us with this. An agency would be
part of the team if they would be affected or are required for research of an issue. Each team will select its own
facilitator of that recommendation to the ESC. The business owner does not have to be the team leader.

ESC assignment draft form-discussion - All
The assignment form is to document if a group has been assigned to do something by the ESC. The "proposal"
section would be the title. You would be able to find that assignment form for an action item, for example,
recruitment process. The business process "description" would be a more thorough explanation of what is
behind the sound bite title proposal. The assignment form is a status report of where we are in the process and
an internal communication for our ESC tracking. It could be a communication tool so other people can see
where we are. The form is modeled after MDT forms. By consensus it was agreed to add a conclusion section
for use when an item is done. We will have a database of the assignment and the action forms on the Website.
People can see what we have been and are doing.

It was noted that the name and the scope of the action item might be modified during the process. Steve said a
submission is an idea and the ESC may expand, contract or modify it. An item might be bigger than the single
issue so there will be flexibility. Darrell asked Tony and staff to add a log to keep track of what has been
submitted and what is being worked on. Steve said we will prepare an executive summary as a communication
tool. Barb C. suggested a place on the bottom of the form for ESC action and approval, so we do not need a
separate form. It also was noted that procurement needs to be included under special.

Issue action form -marketing - All
There was discussion of how we market the ESC and receive ideas from state agencies, from a director of a
department to an employee working in a unit anywhere in the state. Suggestions included: (1) using the Mine
page for notices about the new action form with a link to it, as well as notices when a proposal is being
discussed; (2) Council members send pending issues to division administrators for feedback; (3) ESC to be
promoted in agency newsletters; (4) an official notice of the ESC creation to the Cabinet, elected officials and
other agency directors to say why we are here. The letter could request that they share with the rest of their
staffs. Darrell, with Steve’s help, will draft something from the chairman of ESC that will go to the executive
membership for distribution.

Issue action submission, input and marketing will be an ongoing discussion item. A future discussion point will
be whether we dovetail with the employee incentive awards and, if so, how.




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Business Process Management (workflow) training - Tony Herbert
There is a potential for a new workflow process called FileNet, ITSD has owned FileNet licenses for imaging
for about ten years. FileNet has evolved that product and added some high-level workflow capabilities to
enhance it. The Gartner group puts FileNet as the leader in this area. The Department of Justice is going to use
FileNet extensively inside the new Drivers License Titling Bureau. The process can extend beyond an agency
and be a business process that can connect something from one department that you may need to get access to
with an application that is in your agency and bring multiple things that are going on in different locations
together to accomplish something. It can drive right into a particular application and has a built in toolset. A
presentation and ITSD training are our next step in putting it together and evolving to the next stage with all the
state agencies and approval processes. Tony said the process has tools so in your area you can control your
environment, your location. It’s a centralized architecture, but it has a lot of decentralized capability so agencies
have the freedom to build the tools they need. An enterprise license may cost $500,000 but it would be
economical because all agencies could use it.

It was concluded that FileNet will be invited for a two-three hour high level business management presentation
to the ESC in February-March to show how the business process management tool capability works. The
presentation will be open to other interested parties in state government, especially program managers and
administrators, at a facility large enough to accommodate everyone.

FileNet also will work with ITSD during this time on a proof of concept pilot. ITSD staff will try to take a few
state applications and pilot them. One idea is exploring with the budget office whether this tool could replace the
BCD and Outlook Task combination for budget transactions. After further exploration, we could consider
purchasing an enterprise license so other agencies can use workflow.

Business Process Committee Representation-Discussion - All
Last meeting Darrell asked each tier to send their names to him of who they wanted to be on each committee.
He put it together and made assignments. He requested feedback from the council. If anyone has a problem, let
him know. Consensus: The council accepted team assignments as presented.

DOA business owner support and assignment - Steve Bender
Darrell said he was assured the Director and Steve are supporting the ESC.

Committee and process owner responsibilities - All
Steve B. introduced Lynn Long, Chief of the Human Resources Standards and Services Bureau, who is filling
for John McEwen.

Financials.- Cathy said, as a financial process owner, their focus is on working with SABHRS to identify and
minimize the risk associated with the upcoming upgrade. For the first time since SABHRS is up, the cash has
been reconciled and the system is stable. Agency accountants did a wonderful job. They had very few
adjustments. CAFR was completed faster than ever before and the Auditors said it was very easy to audit. Steve
said the Director’s Office gave Cathy veto power on when the financial upgrade conversion will take place.
Darrell said MDT had only two issues: succession planning and disaster recovery. If the system is down, will
they have an emergency basis ability to pay someone. If they cannot come up, what will they do in order to pay
someone.

Chuck reported as of right now we are on track for the February rollout of Financials, starting conversion
following completion of the batch process February 13, with an outage from the 14 th through the 22nd. That
period includes a holiday so there will be a four-business day outage. In January he and Cathy will have a
jointly-sponsored session for representatives from all agencies to come and talk about the outage period and how
they will respond to the particular identified business needs. They will explain contingency plans in the event
the system doesn’t come up after they start the conversion. They are concerned about being able to meet the
state’s core business requirements during the four-day outage.

Some agencies are participating in testing and it is planned to open up a test database the week of January 20.
They will coordinate some test efforts to put stress on the system from a batch perspective using interface files.
They don’t have any tools to replicate 50 or 100 users on the system concurrently. The week of January 20 they
will orchestrate a test and ask all agencies to participate in a defined window in one day or several days to have
staff involved with entering vouchers or deposits to ensure they have the appropriate resources to support heavy
use of the system. One concern is when they turn the switch and bring up the system on the 23 rd they have
agencies with four days of work to try to recover. They expect the 23 rd will be the heaviest hit on the system

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they have ever experienced. They will have plans they will discuss with agency representatives in January
concerning how to take protective actions on the 23 rd so we don’t have a crash as a result of what will occur on
that one day.

HR.- Chuck presented a follow-up on the HR rollout. There are three problems areas. One is system
performance. To better support the level of use, they brought a CISCO product into the architecture
environment. That ran successfully until Monday. On Sunday, Chuck couldn’t get into Mine and people began
working on the system. The problem is still not solved today so they submitted a trouble ticket to CISCO. The
development people are trying to diagnose the problem. CISCO thinks if they would bring the network down
and bring it back up the problem would clear. They think it is the amount of data that is running through the
switch. We will wait until they know what the problem is before taking any action. As they move forward and
stabilize the environment, Chuck thinks they can eliminate any limit in terms of number of users who can access
the Mine. This is the main avenue to the HR database and ultimately will be the avenue to the Financials
application as well.

Tony said for the Financials stress test in the January 20 timeframe, they are adding additional equipment into
the environment the beginning of January. The architecture they build for HR is the architecture they will use
for both HR and FS. The CISCO product is a key one. We anticipate as we have more activity through the Mine
and accessing Financials, HR and other applications that this problem could occur more frequently if we don’t
understand what is creating it. Understanding how to manage the CISCO product and use it appropriately is the
key to our Financials upgrade as well.

Hank V asked if we have figures for the actual usage of the Mine portal. People are going to the Mine to get
information on committees, etc. and not using it just for SABHRS with a limit of 800 users. We know how
many users access Mine, but we don’t know the purpose. Tony said the plan is to build architecture that will
support 2,000 concurrent users on the Mine. Our goal is to be prepared to handle that level of users in February
when we rollout Financials. Someone asked how many people use SummitNet. Tony said we have 11,000
devices. If the Mine page is the default home page for everyone, is 2,000 going to be enough? Tony said yes for
concurrent users, with the one-hour automatic log off if no work is done. The timeout feature is part of making
this work. This is complicated. We have gone from a client server environment and we put more things out
there to make the PC end work better. Now we eliminate that and it’s all Web-based.

Mick stressed that the financial work we do is so critical that if we do experience access issues and slowdowns it
could be devastating. We need to make sure we have every issue reviewed and discussed. That was the plan
going into the HR and we didn’t come out with it as envisioned. Financials is much more critical than the HR in
terms of the ability to access on a moment’s notice on an ongoing basis.

The second HR issue is payroll verification procedures. Some staff from agencies participated in a small focus
group discussion and Chuck's staff worked with Central Payroll staff, which now have new procedures that were
used during the last payroll cycle. At this point, the plan is to develop a training program and bring in staff from
every agency and walk through the new payroll verification procedures. You can anticipate that someone in
your payroll group will be contacted in the January timeframe and asked to come to a one or two hour hands-on
training session. The main change in terms of a business process is the last component of a verification process.
We are reconciling what was reported in time and labor to what was actually processed on the payroll side. The
new procedure places more of a burden on the Department of Administration’s Central Payroll to accomplish
that last piece of the reconciliation. More details will be coming out shortly concerning those payroll
verification procedures.

The third issue is some problems with the HR journals. There were a couple of conditions that were causing the
problems. The most prevalent one was employees in multiple jobs bridging across state agencies. We
implemented a customized solution within the application that we believe has eliminated that particular problem.
Another ongoing problem involves situations where we are paying employees for travel and other types of
reimbursements and those employees are coding those expenses (the different task profiles account codes vs.
how they coded their time). The Department of Justice is seeing some exception reports and a number of other
departments are being affected, e.g., MDT. The state has multiple funding and that creates opportunities for
problems. We have been working on a pay cycle basis with the person in Central Payroll to assist the agencies
with understanding what the correcting entries need to be and the agencies have been making those to the
journals on the general ledger side. We know that is not a good solution. Yesterday we decided we were going
to create a customization to correct this problem. We are optimistic we will be able to complete development
work by the end of this month. For the first payroll cycle that starts in January, we would hope this problem will

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be solved when the journals are created. Unfortunately, if we are not able to get through this development effort
by the end of December, we will have to delay completing the work until February. The individuals involved in
this work are also critical to some of the year-end W-2 reporting and other year-end activities and will need to be
pulled off of the project if they were not able to accomplish this work. If we are not successful with getting this
solution in place in January we will send out a communication to all the agencies so they understand that this
problem will persist for another month or so.

Someone asked if Central Payroll will give the information to make corrections or are you going to do that
centrally and put the expenses back where they are supposed to be. Chuck said they did discuss the possibility of
trying to make the corrections in the Department of Administration but they don’t have the resources. It would
take two people for one day each payroll cycle to get the corrections in place. Chuck will follow up with Central
Payroll staff to see if there is something DofA can do to expedite provision of the information so agencies have
more time to make corrections.

Stave said what’s high on his agenda is to get more accounting resources in Central Payroll. It’s problematic
because they had three times more overtime this year than last. Chuck and his staff and the Central Payroll staff
have been working together to evaluate the whole reconciliation process. When the payroll journal fails on the
general ledger side, the work will be interrupted as they prepare for the calendar year-end rollover but they will
get back on that task late January or early February. We want to minimize the effort of agency staff as well as
the Central Payroll staff that is required to resolve journal errors. Barb C asked what would happen if they did
not make the journal corrections. Chuck said the big issue it immediately creates is that Central Payroll does not
have enough cash to meet their needs in terms of disbursing monies to the IRS, our benefit providers, etc. He
said that is not happening because they watch journals very closely.

Procurement.- Cheryl introduced Hank Voderberg to the council. The timing of this ESC reorganization fits
well with their efforts to move forward on the e-Procurement applications. Hank is only ½ FTE so he is working
with her on what had been planned for 3.00 FTE. He will oversee the PeopleSoft and how to better utilize the
capabilities that it offers them. For the last few years, they have been working on a one-stop solicitation page
and all business proposals for the State of Montana now reside on one Web page, with links to MDT highway
construction, FWP construction sites, and Architecture and Engineering. As of October, the state agencies and
the universities are posting there. Cheryl and Hank are exploring an online vendor registration system. One of
the advantages would be that agencies would have easy access to the vendor’s list, which has been a problem for
years and years. They also are looking at an e-Commerce application. She said she is looking forward to
working with the group that is set up to focus on procurement issues because they welcome outside agency input
to help them think harder about how to manage their processes better.


New Business
ESC Issue Action Items [Action Form information is italicized]
Recruitment and Selection Process- Presentation - Lynn Long
Business Process Affected: Recruitment and Selection process
Define Issue: Recruiting and hiring the best possible applicants for vacant positions is a critical management
activity. The "age wave" is upon us. We are faced with the retirement of many workers in the next few years.
Competition with other employers for replacements will be significant because generations X and Y are much
smaller than the baby boom generation. One of the steps we can take to address this issue is examine how we
perform recruitment and selection activities. Applicants applying for positions in state government find that our
process can be confusing, redundant and time consuming. For example, an applicant applying for multiple
positions in the same classification must submit a separate job application for each position. The generation of
workers we need to hire is computer literate. They have grown up with the Internet as a source of information, a
way to communicate and as a way to conduct business. Collecting and reviewing applications and
communicating with applicants is time consuming and requires several manual steps. Ownership of the
PeopleSoft HR module provides opportunity to enhance the processes associated with how applicants apply for
positions and how state agencies collect and process job applications and communicate with applicants.

Suggested Change: To reengineer the state's recruitment and selection business process with the intention of
implementing e-Recruit functions contained in PeopleSoft.

Pros and Cons of Solution: A self-service/on-line system streamlines the recruitment and selection process.
·Easy preparation of detailed job requisitions (vacancies) including screening criteria for a single position or
multiple positions. ·Easy to clone past requisition and edit to fit new opening. ·In partnership with Montana Job

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Source and Job Service Workforce Centers, mangers and human resource (HR) staff can post jobs through one
easy to use interface. ·Easy for applicants and employees to apply and update application. All Job Service
Centers have computers for public use. As recruitment partners, Job Service will have information on how to
apply for a state jobs using the on-line process. ·Managers can screen, rank and track applicants throughout the
application process. ·Managers and HR staff can generate recruitment letters for internal and external use.
·Enter and track expenses associated with job requisitions and/or applicants. ·Applicant hire - system
automatically uses applicant data to create an employee record. ·HR staff can generate a variety of recruitment
and selection reports to analyze the process. Many analyses are required to comply with federal and state laws.

Cost/Savings Analysis: The State's turnover rate is about 12% (approximately 1,400 employees leave state
government each year). It is expensive to recruit and fill positions. Significant timesavings for managers, HR
staff and applicants can be achieved through use of this new functionality. Savings include: ·Eliminates many of
the delays typically associated with recruiting, increasing the chances to make the first offer to the most
qualified candidate. State of Montana is losing qualified applicants due to the cumbersome, lengthy and
unfriendly application process. ·Staff time preparing recruitment and selection materials, and advertising (may
not have to advertise if there are qualified applicants in the system). ·Staff time organizing applicant materials,
screening, interviewing and writing letters to all candidates. ·Applicants wouldn't have to reapply for each
opening. ·Lost productivity during the vacancy. There are other benefits derived such as: ·Greater ability to plan
and be ready for significant statewide human resource changes (Baby Boomers retiring); ·Reduction in
inefficiencies and increase in competitiveness with the human resource marketplace. ·Greater ability to attract
new and stronger talent. ·Greater ability to handle human resource challenges across agencies. ·Greater
understanding of human resource challenges within the state. ·Greater ability to do career and succession
planning.

Affected Parties: State agency staff involved in the hiring process: HR, line managers, Job Service Workforce
Centers, Job applicants and employees

Implementation Responsibilities: Department of Administration: SABHRS Services Bureau, HR Standards and
Services Bureau; State agency HR staff; Department of Labor and Industry: Workforce Services Division

Discussion - All
This proposal is for the Recruitment and Selection Process. We have to reduce the amount of time it takes for
people to go through the hiring process. Lynn hopes e-Recruit will give agencies options that will help both to
attract talent to the state and to speed up some of the processes. Russ McDonald from MDT is willing to pilot
the project. The state owns the e-Recruit module but has not paid the maintenance on it. Chuck said because we
are in arrears it would require about a $20,000 investment, which is not in the budget. Tony said SABHRS is not
funded for e-Recruit and they also will need a support team because it will not work on its own. Chuck said at
one time PeopleSoft offered to provide us with a limited opportunity to use the product in a 60-day window, but
it did not seem to lend itself to a proof of concept. We will need to go back to the negotiating table with
PeopleSoft if this is something we want to pursue. There would also need to be an investment in order to ensure
we have the ability to support this product. None of Chuck's staff has attended any of the related training for this
product. Someone asked if it was determined not to be of value. Tony said the priority issue had to be bringing
up the HR upgrades. John has been trying to move e-Recruit forward for more than a year, but the resources
have never been available.

It appears that some agencies are supportive are and some aren’t. Steve A said the Dept. of Revenue HR people
think it is a good idea. They go to the HR advisory groups and in a general discussion other state agencies
thought it was a good idea. However, a December 2002 survey of personnel officers ranked it low on the
priority list. If you ask those same questions of the division administrators, you may have an entirely different
outcome. Steve B said maybe we need an issue paper. Maybe it’s not an immediate implementation idea but
some direction we want to go as a state. We do not even accept electronic applications when nearly all outside
applicants check the box to share their application with other agencies. That would be a step forward.

Action: Mick made a motion that the ESC move forward with studying the issue of re-engineering the recruiting
and hiring process and that the team come back to us with recommendations. Lynn said they have a group
working on the re-engineering of the recruitment section. It’s a multi-agency group looking at the application
and how the process works, who accepts electronic applications vs. faxed and paper applications. She said they
have not moved to the development, cost and support issues or proposals for legislation. This could be part of a
budget package for the next session.


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If Lynn were to do a BPR on our hiring process and bring back the findings, then these other things could follow.
Members began a general discussion of process. Mick said when you talk about the re-engineering and we have
canned software, sometimes we get into a box regarding putting down exactly what we would like. Perhaps we
could review the canned software or the PeopleSoft module for e-Recruit and determine if it would be adequate
to do a good job. We could re-engineer around the electronic piece. There are different ways to look at it. Once
you get into re-engineering and put down everything that everyone wants and it doesn’t fit , we don’t back off
from what we envision as the ultimate process. Steve B said he told John that he failed to get this last time
because he had not done the BPR on the recruitment process independent of the software. You need to develop a
consensus on what the ideal process is. Then you figure out the software solution. If we go e-Recruit we have to
cut some corners. It may be a FileNet workflow application. Darrell said we need to go back to the basics of
problem solving. You need to identify the problem, the needs, the alternatives, the pros and cons, and the cost
benefits of the alternatives and then come to the logical solution. E-Recruit may be one of the alternatives that is
the most cost effective and beneficial. It might not be a solution of software, just a process. We will review the
action form to see if more problem-solving language needs to be added.

Barb C said being an HR manager for the Department of Commerce she thought we need to go back and do a
business process review of how we recruit and apply for jobs in state government. We need to figure out if there
is a way to reduce the time and make the current process less cumbersome, along with reviewing what e-Recruit
in the SABHRS system does and see if those two come together and match in any way.

Action – All
Darrell said a motion was made and seconded to move forward with studying the issue of re-engineering the
recruiting and hiring process and that the team come back to us with recommendations. There is no connection
at this point to e-Recruit, but it may be included in the recommendations. Motion carried unanimously.

Payments to Vendors- Presentation - Cathy Muri
Business Process Affected: Payments to vendors
Define Issue: Agencies currently send the vast majority of their payments to vendors through warrant. Payment
through warrants is not as cost efficient as electronic fund transfer (EFT) because of check stock, printing and
mailing costs. Warrants are also subject to loss, forgery and fraud.

Suggested Change: Policy requiring payments to vendors be made by EFT with few exceptions. Dept of
Administration is also exploring a way for vendors to access payment advices on-line through a password-
protected database.

Pros and Cons of Solution: Pros - payment received sooner; eliminate deposit slips and trips to the bank; no
lost, stolen or forged warrants; less expensive for state. Cons - resistance from general public who don't want to
supply bank information or have no bank account; interface system issues;

Cost/Savings Analysis: Mailer warrant cost $0 .58; Non-mailer warrant cost $0 .178; EFT cost w/mailing$0 .51
Volume of mailers - approx 1.2 million Volume of non-mailers - approx 365,000 Some savings will accrue to
state agencies through warrant stock elimination but the big savings will be the reduction in postage when EFT
advices are on-line.

Affected Parties: State agencies - all funding sources Vendors and members of the general public

Implementation Responsibilities: Dept of Administration - Administrative Financial Services Div

Discussion - All
Cathy said this issue of the number of warrants vs. EFTs that state agencies pay state vendors has been around
for a long time. It came to a head when the Budget Office, during the last budget preparation timeframe,
reviewed the warrant writer rates. The warrant writer unit is a small group. For five people the budget is
$900,000 and half of that is postage. They saw some opportunities for savings and initially wanted to propose a
statutory change that would require agencies to send all payments electronically, with certain exceptions. Steve
and she managed to talk them out of that with the understanding that they would make an effort to move to more
EFTs. It is what needs to happen. It is not realistic to say all payments must go EFT, but we can do a better job
than we do now. Cathy said in the legislative subcommittee Senator Barkus gave her the same message, saying
they wanted to see a change in this budget by the 2005 session due to more EFTs. The rough numbers from last
fiscal year was 1.2 million warrants. A quarter of that many EFTs go out. The Teachers’ Retirement System
and PERS are doing fabulously on EFTs. A lot of individual agencies maintain their own vendor files. The

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warrant writer unit is responsible for what we call state vendor files. It is the generic one that all state agencies
have access to for the common vendors. We are doing pathetically. The last count we had about 85,000 vendors
and 289 were EFT out of the state vendor common file. State agencies are not in the habit of asking the vendors
if they want their payments electronically.

Cathy had a banner put on all warrants asking vendors who want to receive their next payment electronically to
please call the phone number listed on the warrant. She had so many calls and continues to have calls that they
hired a full-time temporary Express Services person for six weeks. When they receive requests from places that
maintain their own vendor files, e.g., someone from Child Support wants their payment EFT and they have been
receiving checks, they send it to the agency. The banner on the warrant gets the vendor’s attention and it doesn’t
cost anything. Cathy passed out a draft management memo to the council. When the DofA issues a policy
regarding their charge in statute or ARMS, it will go out as a management memo. This draft will be adjusted
based on the agencies’ comments. This is a business process change where the agencies, when they have a new
vendor, will need to ask for bank information. The warrant writer costs will be reduced and all will share in the
savings. Vendors will get their advices on a password protected Website so they know what the payment is for
and when they will receive it. DPHHS has done a great job with Medicaid. If a vendor were to receive a
payment and not know what it’s for, the workload will increase due to phone calls. Some of the issues agencies
shared with Cathy are listed below.

There are low-income people who are paid who have no checking or savings account. There also are legal
requirements, e.g., when a loan closes you have to have a warrant. In the 7.02 version of SABHRS, you have a
vendor, e.g., Pitney-Bowes, who is in ten locations. You have to send them warrants because you can only send
an EFT to one location. Cathy said she understood this would not be an issue in the new version. If there is an
issue, that will need to be an exception too. Legislative Services is asking that Legislator per diem payments
continue to be by warrant. What do you do with one-time payments to individuals who don’t want to give you
their bank information, e.g., applicant for a big game license whose name isn’t drawn. Banner is having a
problem with sending EFTs. Certain branches of U of M are not capable of sending EFTs. There are certain
banking institutions in the small towns that are not ACH members.

Database issue. DofA is not expecting agencies to kick in on the money for database creation. We should be
able to cover those costs from the savings in the warrant writer program. Someone asked why couldn’t the
procurement card be used as a payment card. What about paying more vendors with a procurement card. Cathy
asked if it wasn’t already being used as a payment card. Cathy said maybe it should be included in the language
that agencies are strongly encouraged to make vendor payments with a procurement card whenever possible or
as an alternative to EFT. Tony said there is a $5,000 limit. Someone said they could manipulate the limits and
the accountants could have the card and pay bills with them. Darrell said they use procurement cards at MDT
for buying computers for over $5,000. They have a limit over $100,000 for one of their areas because they use
the procurement card for purchasing many different things. Mick said a purchase could be made by someone
and when the invoice comes in, the accountant could use the procurement card to make a payment. Someone
suggested using it for paying monthly bills. Someone asked if you could require the vendor to accept the
payment on a procurement card subsequent to the actual acquisition of the product. Another agency reported
they have language that vendors may be required to accept electronic fund payments. It is in their boilerplate but
she was wondering about expanding it to pay a monthly utility bill. If a vendor takes an EFT, it is in their bank
the next day. If they go through the procurement card, it is within 72 hours.

Steve A said it is an easy sell if you do business with the State of Montana you have to accept electronic funds
transfer. As a vendor, if I want to do business with the state, fine. The other side of that issue is you do business
with the state because you are statutorily required to do business with the state. The Department of Revenue
distributes revenues to cities, towns and counties. He said he looked into this before today's meeting. All 56
counties will accept electronic funds transfer. Out of 132 cities, only 26 are registered to receive money by EFT.
Several years ago when HB124 was passed, DOR sent a letter with a big clear box requesting EFT distribution
and a second letter saying we would like you to receive your payments EFT. The local government response
was very poor. Another thing we are getting is some reluctance from cities that don’t want funds co-mingled
with another account. This should be addressed in the management memo.

A person who files an income tax return and gets a refund is a vendor. Everyone is a vendor. Should the
exceptions be different for those who are just doing business with the state? I want to sell you my wares vs. I
have to do business with the state because I’m a taxpayer or I’m the recipient of a revenue distribution.
Statutorily I’m required to do business with you. We all realize whatever the process we have and however this
is crafted, there will be exceptions and it won’t be mandatory just because of the way we are doing business.

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Cathy said the federal government requires every citizen to receive their Social Security checks electronically.
In order to receive their checks, each person has to get a bank account or else. She said every city should be
mandated. Terry said especially in these cases where we are talking about intergovernmental type relationships,
why can’t that be part of our proposed legislation. Vendors as a whole, if you exclude the taxpayer part of it,
would want EFT. Hank said he gets other payments so if this information gets transferred to other agencies all
of his stuff gets electronic files. He just didn’t want to sign up four times. He likes to go to the Website to look
at his records to make sure all the payments are getting there. For people with no bank accounts, the state issues
ATM cards. The funds are distributed through an ATM account so they can go anywhere to pick up the cash.

Cathy said each vendor will be notified that they will be able to access the payment advice and warrant writer
will take care of those notifications. Carleen says when she pays someone who has an EFT, she e-mails them or
notifies them someway. Cathy said if you are sending an EFT and you’re mailing an advice it is still cheaper
than preparing a warrant and mailing it. We must have all these warant security features because there are
creative people out there doing fraudulent things to our checks. Printing costs are a lot cheaper on an EFT
advice. In the future, she wants to get rid of the advices, which are seven cents less. Tony said IBM doesn’t
give employees a choice. They do not print a check or pay advice. They have a Website where you find out
what you are paid or call your bank to find out what the direct deposit amount is.

Action - All
Tony made a motion that we endorse this concept and ask Cathy to get her finance team together to study the
issue, develop the policy further and look into some of the issues we talked about. The motion was seconded.
Darrell recommended that the procurement team also be part of the process to follow up on those ideas
discussed. Motion carried unanimously.

ESC Reporting (accountability to DOA) - Darrell Zook
We as the ESC are an advisory board but periodically we need do a recap of our accomplishments, where we are,
what we’ve done either quarterly, semi-annually, or annually posted on the Web. Tony said we had a discussion
with the Director. We agreed to figure out when and how we go to the Cabinet on a regular basis so they are
apprised of what we are doing. The Director recommended all councils submit a one or two page executive
summary following every meeting to be on the Web page with the minutes. Terry J said there were a number of
good ideas that address the whole issue of state government as a business. The part he doesn’t see is how we get
that into the legislative process. When you get into the legislative process you get into the subcommittee
atmosphere and they start picking away at individual agency budgets. Nowhere is it brought up that government
as a unit is trying to do all of these things to make it more efficient. How does the overall picture get
communicated so legislators know what is going on.

Tony said we could ask to be put on the Legislative Finance Committee, go to them and explain what we are
doing, some of the ideas we have in front of us that we will be bringing forward to them. Next session this will
give us credibility. Jane suggested Brian Wolf goes formally to the Finance Committee, but we also could go to
the Audit Committee and the Legislative Council during the interim with a presentation within the next six
months to talk about a number of these issues that the study committees are working on. Mick also said to go to
the IT board. They meet tomorrow and Tony said he will present the ESC. Steve said we have the executive
committee that sits above this. They are the chair, vice-chair, Steve and Brian Wolf so we can carry it to a
higher level.

Future Issues:
 Darrell said he will address pay advices as an MDT action item for the next meeting.
 Tony said the Department of Administration will be submitting an idea related to enterprise reporting off
    SABHRS.
 Terry has been working with the Department of Justice to develop an easier way for Justice managers to get
    access to reports through SABHRS. This should be in front of us so it is managed.
 Steve B. mentioned the 34% increase in work comp rates. He has a proposal coming from Risk
    Management to centralize early return to work facilitation so agencies make sure they are getting injured
    workers back to work as soon as they can. This idea will not go anywhere without a tremendous amount of
    buy-in from the agencies. He wants to bring this to the ESC. Other states have taken that type of approach
    and realized tremendous savings.

Darrell said he wanted to officially thank Tony, Jane and John McEwen, who are retiring, for service on this
Council. They have provided credibility, experience and knowledge to this council and they will be missed.
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Agency agenda items:
Time did not allow further discussion.

Recap of assignments - Darrell Zook
All have been assigned with marketing the ESC by going back to their agency. Darrell will get together with
Steve to do a letter introducing the council to the Cabinet.

Tony will come back to the council on the business process workflow management, setting it up for state
government. Agencies will be included.

Chuck is going to follow-up with HR on getting information to the agencies on the payroll problem.

The Chair and Steve B will look at the steps of problem solving in relationship to the action form.

The HR committee and business process owner with HR will report back to this council at the next meeting with
a plan on the recruitment process.

The committee for EFTs will be the financial and procurement teams. They will report back to this committee
with their recommendation at the next meeting.

Steve Bender, Tony Herbert and Darrell will develop an executive summary.

The next meeting will be February 26. The meetings will be the third Thursday of every other month.

Brian, Steve, Darrell and the Vice-Chairman will need to meet as well to do the planning for the agenda on
issues as they come up. We will pre-schedule the meetings throughout the rest of the year so they can pre-
schedule themselves to get together before the meetings to make sure they have the recommended agenda in
place.

The meeting adjourned at 12:05 pm.

Respectfully submitted,
Jane Hamman




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