DFA ACTS ON EFFICIENCY PROJECT RECOMMENDATIONS

"Analysis of these themes and issues has led to larger findings related to statewide issues and opportunities, which have been summarized into nine major recommendations." PricewaterhouseCoopers LLP, Efficiency Review of Arkansas State Government (August 2016)

(August 2017) The state Department of Finance and Administration (DFA) is acting on nine major recommendations from PricewaterhouseCoopers LLP (PwC) a leading international management consulting firm retained by the Policy Foundation in 2016 to study the agency.

DFA actions are outlined in a 13-page DFA memorandum presented last month to members of the Transformation Advisory Board,¹ a panel created earlier this year by freshman Gov. Asa Hutchinson.

PwC Recommendations

Gov. Hutchinson instructed state agencies that report to the executive branch to cooperate with a Policy Foundation project to identify potential efficiencies in Arkansas state government.² The Policy Foundation later commissioned PwC to examine DFA's operations. DFA officials cooperated with the project.

PwC produced a 42-page report that featured nine major recommendations:

· Develop a statewide strategic framework to align budgets and operations

· Develop a centralized risk management function to appropriately identify and manage risk, especially procurement risk

· Re-evaluate organizational alignment and functions

· Transform the talent of the State through a human resources strategic plan

· Modernize the State’s compensation and benefits programs

· Conduct deep process analysis to optimize accounting and tax assessment/collection processes necessary to execute the State’s mission

· Automate processes to allow the State and customers to use self-service options

· Enhance Information Systems governance and develop a centralized shared services and infrastructure architecture plan

· Enhance innovation and collaboration, focused on the use of digital technology to increase efficiency

Following are summaries of DFA actions taken in response to the PwC report.

Strategic Framework

DFA Response: "The Department is currently participating in the strategic planning process ... The plan will be tied internally to office and personnel performance evaluations."

"The Department will offer additional training to agency fiscal officers to ensure they are utilizing the Annual Operations Plan process to create useful and relevant budgets. The Department is currently exploring new tools to replace or update the current antiquated budget system, which could better align strategic goals, measurements, and results as part of our budget process."³

Risk Management

DFA Response: "DFA has been working with a contractor to develop an electronic procurement process that will replace the current process. This process will increase efficiencies ..."

"New risk management office, Office of State Procurement Office of Personnel Management. Along with the launch of E Procurement there will be training for procurement staff who will utilize the new system. As part of its strategic plan, the department is developing enhanced comprehensive training internally and for state agencies."⁴

Organizational Structure

DFA Response: "Internally DFA has made changes to top level organizational structure to better align the agency structure ... DFA has eliminated duplicate positions within divisions received through mergers, by leveraging DFA's existing administrative functions."

"The Department is currently working on enhancements to its State Agency Vehicle Application System ..."⁵

Human Resources

DFA Response: "The state's new Pay Plan, implemented July 2, 2017 gives agency directors more flexibility to offer raises to retain skilled staff. DFA is also exploring an internship program to help cultivate skilled fiscal staff."

"Office of Personnel Management (OPM) will launch a new electronic personnel evaluation system. This new system, related policies, and training will help unify personnel evaluations and tie salary increases to employee performance."⁶

Modernization

DFA Response: "DFA OPM developed and recommended a new pay structure that was approved by the 91st General Assembly. Act 365 of 2017 consolidated pay grades, gives flexibility to agency directors, and developed separate grades for technical and skilled positions ... (A) new evaluation system and related policies will tie salary increases to performance ..."⁷

Outstanding Tax Receivables

DFA Response: "The Department's Office of Field Audit began an afterhours phone line pilot program to facilitate collections. To date over 73.2 million has been collected on the delinquent amounts which is a 9% increase. The extended hours staff executed an additional 2,750 payment plans. As part of DFA's Strategic Plan the Department plans to make the extended hours service" permanent.⁸

Customer Self Service Options

DFA Response: "DFA will begin implementing a new law (allowing) for the use of electronic copies of Driver's License/ID ... After the implementation of these self-service options the Department plans to do a utilization study of both foot traffic in revenue offices and online utilization."⁹

Information Systems

DFA Response: "Working with DIS to organize state Chief Information Officers to discuss data center consolidation and infrastructure planning. DFA offers Grants Management Training ... Modernization of AASIS accounting system to streamline processes and meet future needs of state agencies."¹⁰

Digital Technology

DFA Response: "DFA is ... implementing its state wide systems as well as developing new ones that will cultivate efficiencies. These systems include E Procurement, Empowering Arkansas State Employees ... Online Evaluation System ... (and) State Agency Vehicle Administration."¹¹

Conclusion

DFA is advancing recommendations in PwC's report to the Policy Foundation.

--Greg Kaza

¹ "Gov. Hutchinson Names Efficiency Panel" (Feb. 19, 2017) Policy Foundation research memo

² "Gov. Hutchinson Memorandum: State Government Efficiency Project" (January 2016) Policy Foundation memo