State of North Carolina
Office of the State
Controller
| James B. Hunt, Jr., Governor |
Edward Renfrow,
State Controller
Gwen Canady, Chief Deputy
|
April 4, 2000
MEMORANDUM
| TO: |
Senator Eric Reeves, Co-Chair
Representative Joe Tolson, Co-Chair
Select Joint Committee on Information
Technology |
| FROM: |
Edward Renfrow, State Controller
Marvin Dorman, State Budget Officer
Rick Webb, Chief Information Officer |
| SUBJECT:
|
Information Technology
Budget and Cost Reporting |
Senate Bill 222 requires the Office of
Information Technology Services (ITS), Office of the State Controller (OSC),
and the Office of State Budget and Management (OSBM) to develop a system
for the budgeting and accounting of information technology expenditures
in order to facilitate the statewide management of information technology
costs. Representatives of ITS, OSC, and OSBM are working together to design
a cost effective process that facilitates management reporting by working
within the existing capabilities of the statewide budgeting, personnel
and accounting systems in order to minimize additional costs. This committee
proposes the following methodology to report budget and actual cost data
for informat ion technology (IT) operations and projects.
Budgetary Reporting
Beginning July 1, 2000, as part of
the IRMC project certification process, all IT projects with an estimated
cost of at least $2 million are required to be separately identified in
an agency’s budget thr ough unique budget fund code(s). Only new IT projects
are subject to this requirement in order to minimize changes in the agency’s
financial and budget records. However, OSBM is reviewing all projects in
an initiation or planning status on the IRMC open projects list to determine
if it is cost effective to require new budget fund codes for these projects.
The format for these budget fund numbers
is xTxx. The assigned budget fund number stays with the application throughout
its lifecycle, from initiation to retirement. The unique fund numbers facilitate
budget to actual cost comparisons for IT projects. ITS is incorporating
this policy into their budget instructions which will become part of the
OSBM budget instruction package.
Expenditure Reporting
OSC is continuing to provide a calculation
of the total IT costs statewide through the Information Technology Expenditures
Report. This report combines information from the Personnel Management
Informat ion System (PMIS) and the North Carolina Accounting System (NCAS)
and is updated quarterly. OSC is working with agencies and universities
to insure that IT costs are recorded using the appropriate account codes
and therefore insure the accuracy of the to tal IT cost estimate.
Additionally, OSC is implementing the
following new processes to further facilitate information technology reporting
at a statewide level. These new processes are effective July 1, 2000, and
OSC is prov iding agencies with additional instructions as these new processes
are implemented over the next few weeks.
-
OSC is adding several new statewide account
codes (5382xx) to the chart of accounts in order to track reimbursement
of IT costs among state agencies more effectively.
-
OSC is assigning a unique 5-character
project code number to each significant IT development project or ongoing
application. Agencies use these project codes to flag specific project
costs within NCAS. The pro ject code links the NCAS to the Application
Portfolio Management System (APMS). Significant IT projects are those projects/existing
applications that meet one of the following criteria:
-
An application development project estimated
to cost at least $2 million. This includes all projects currently on the
IRMC Statewide Projects List as well as any new projects coming before
the IRMC for certification.< /FONT>
-
An existing application determined to
be "mission critical" by the State Auditor and selected for the Y2K audit
review process.
The project code number generates
a unique sub-ledger within NCAS for IT project reporting. Agencies key
the assigned project code number in a separate field on requisition, purchase
order, invoice, or journ al voucher lines that are associated to the specific
IT project. Agency financial subsystems that interface data to NCAS should
also include a project code number when applicable.
Project level expenditure reporting
will not include salary and fringe benefit cost transactions interfaced
from the PMIS and Central Payroll systems. Both the PMIS and Central Payroll
systems would have to be modified to create a new field to accommodate
a project code for each position's funding split. Further study is required
to determine the cost effectiveness of such a change; therefore, modifying
these two systems is not recommended at this time.
-
OSC is providing ITS with total expenditures
and encumbrances by project code to accommodate analysis through the Application
Portfolio Management System (APMS). Each project code is associated to
an applica tion code within APMS so that APMS can accumulate and report
life cycle costs of significant IT projects.
We will keep you informed of our progress
in implementing these new budgetary and accounting processes and increasing
standardization of IT reporting in the State.
CC: IRMC Members
Chief Executive Officers
Chief Fiscal Officers
Chief Information Officers
Accounting
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