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April Fools!!! Strategic Change in MMIS Vendors ... Flippe


April Fools!!! Strategic Change in MMIS Vendors ... Flipped the Switch on April 1, 2003, State Auditor Received the First of Many 'What Can We Do? ... – PowerPoint PPT presentation

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Title: April Fools!!! Strategic Change in MMIS Vendors ... Flippe

IT GovernanceLessons Learned
  • Russell W. Hinton
  • State Auditor
  • State of Georgia
  • September 25, 2007

IT Governance
  • System of management tools and structures that
    guides and defines how an organization operates
    through rules of engagement, rather than to
    administer or manage particular functions
  • An IT governance system gives the stakeholders
    the opportunity to be involved in the technology
    decisions that impact them.
  • Consistent with the idea that government business
    processes and needs should drive technology
    decisions, not vice versa.

IT Governance Functions
  • Identifying Technology Needs Benefits, costs,
    and risks associated with each potential use.
  • Prioritization of Technology Investments
    Evaluation and prioritization of projects by a
    cross-organizational team, resulting in
    recommendation of a set of projects for funding.

Project Identification
  • Project Costs Total budgeted costs should
    include hardware/software capital outlays and
    application development costs. Application
    development can be calculated based on the total
    forecast number of project hours times an average
    internal/external hourly cost.
  • Projected Benefits An attempt should be made to
    quantify the total annual projected benefits.
    Often difficult to estimate.

Project Identification
  • Time Frame Estimated time frame should include
    not only direct project development hours, but
    also the lead time required to define and specify
    the project requirements, as well as the time
    involved in testing and implementing the
    production system.
  • Project Dependencies To meet the forecast
    project development budget and time frame
    schedule, there are a number of project
    dependencies that should be considered that could
    cause delays, overruns, and/or cancellations
  • Redirection of internal staff from other projects
  • Hiring outside consultants, including those with
    specialized technical skills
  • Data center requirements
  • Internet security

IT Governance Functions
  • Assigning Accountability Must be accountability
    for achieving results and realizing value
    promised by the business case for the particular
  • Critical Project Review Executive committee
    reviews progress of projects against original
    business case.

Be of good cheer, Master Ridley, and play the
man, for we shall this day light such a candle
before the Critical Project Review Panel as I
trust by God's grace shall never be put out."
-Optimistic Agency Director
Foundation of IT Governance
  • Joint Decision Making Between IT Departments and
    Operating Departments
  • Targeted Involvement of Key Participants
  • IT Department Focused on Success of Customers
    (Operating Departments)

Importance of IT Governance Structure to
Legislative and Financial Leadership
  • Creating Value Through Technology
  • Not Enough to Control Costs and Collect
    RevenuesGovernment Must Create Public Value with
    Limited Resources
  • Enterprise Systems Have Great Potential, However
    Benefits Are Often Lost When Systems Are Manage
    From A Departmental Silo Perspective... A
    Cross-Organizational Perspective is Essential

Importance of IT Governance Structure to
Legislative and Financial Leadership
  • Phoenix 2000 (Rising From the Ashes)
  • Committee of 80 ???
  • Steering Committee Represented Diverse Interests
  • Democracy Ruled, Pandemonium Ensued, Needed a
    Benevolent Dictator
  • After 2000 Modifications, System Looked Much
    Like Predecessor
  • Cover Your Ashes

Importance of IT Governance Structure to
Legislative and Financial Leadership
  • Producing Information of Value to Government
  • Financial Leadership Must Provide Broad and
    Accurate Information to Decision Makers
  • IT Governance Can Define
  • What Data is Important
  • Who Is Responsible for Collecting and Maintaining
    Such Data
  • How Such Data Will Transform to Useful,
    Accessible Information
  • Creation of a Singular Version of the Truth
    Reduces Potential for Misunderstandings Which Can
    Sabotage Legislative Deliberations

House Bill 91
  • OCGA 50-6-10(a)
  • Established deadline of September 30 following
    each fiscal year end to provide financial and
    program information to
  • Lieutenant Governor
  • Speaker of the House
  • Chairs, House and Senate Appropriations
  • Chair, House Budget and Fiscal Affairs Oversight
  • House Budget Office
  • Senate Budget and Evaluation Office

House Bill 91
  • Original House version required each agency to
    provide variety of information to presiding
    officers of the House and Senate and Chairs,
    House and Senate Appropriations
  • Senate version, as agreed to by the House,
    required the State Auditor to accumulate
    financial information and prepare report and/or
    provide access to electronic documents and/or the
    state accounting system for a significant amount
    of financial information.
  • Placement in State Auditor enabling statutes
    played off State Auditor Access to Information

Situation Assessment
  • Everything is funny as long as it is happening
    to someone else.
  • Will Rogers

House Bill 91
  • Written Reports
  • The bill requires all revenue to be reported, and
    indicates that the report should include the
    statutory basis for collection, the amount
    collected, expended, or reserved, and a
    reconciliation of the revenue balance. Fund
    Source within Program Trial Balance
  • The bill requires the list to be itemized by
    program as they appear in the General
    Appropriations Act.
  • For every program outlined in the General
    Appropriations Act that directly provides
    healthcare services or benefits, the State
    Auditor must provide a listing, by category of
    assistance, of the unduplicated recipients served
    and the total expenditures associated with the
    category of assistance.

House Bill 91
  • Electronic Documents/Access to State Accounting
  • A list of all written contracts entered into by
    the agency during the fiscal year which call for
    the agency to expend at any time in the aggregate
    more than 50,000.
  • A list of employment or consultant contracts,
    whether or not in writing, which the employee or
    consultant would be paid an annual rate of
    20,000 or more, including direct and indirect or
    deferred benefits
  • This provision was changed to indicate that the
    list should include all contracts in which the
    individual will receive 20,000 or more in total
  • A list of the names of each person, firm, or
    corporation that has received from the agency
    payments in excess of 20,000, including the
    amount paid to such person, firm, or corporation
    during such period.

House Bill 91
  • Electronic Documents/Access to State Accounting
  • A list of consultant expenses and other
    professional services expenses
  • Salaries and expenses of full-time and part-time
    employees and board members
  • Payments rendered by outside companies or
    agencies to the agency for any and all services

(No Transcript)
Inadequate Monitoring Leads to Yet Another IT
  • Inadequate monitoring is often the result of the
  • Poorly established criteria for evaluating
    vendor performance
  • Perception of oversight as a responsibility to
    develop a partnership rather than enforce rules,
    regulations, or contract provisions
  • Perception of oversight/monitoring as hindrance
    to efficient processes
  • Focus on rules and regulations rather than
  • Failure to conduct follow-up reviews to ensure
    that corrective action was taken and,
  • Failure to identify the risk and level of
    review necessary for each vendor.

April Fools!!!
  • Strategic Change in MMIS Vendors
  • Implementation Contract Allowed Vendor to Perform
    In Their Best Interest
  • Idea of IV V Scrapped As Too Time Consuming and
  • System Testing Indicated Major Flaws, Vendor
    Prevailed Upon Executive Leadership to Go Ahead
    and Turn It On
  • Flipped the Switch on April 1, 2003, State
    Auditor Received the First of Many What Can We
    Do? Calls That Very Night
  • State Medicaid Agency Has Not Yet Fully Recovered

Effective Contract Monitoring
  • Regular Programmatic Reports from Vendor
  • The contract should require the vendor to provide
    specific programmatic information on a scheduled
    basis to determine if the performance measures
    are being met.
  • Programmatic reports should require information
    related to the performance measures (outputs and
    outcomes) in the contract.
  • Payments Linked to Satisfactory Performance
  • For contracts that involve monthly or quarterly
    payments, agencies should require a vendor to
    submit programmatic reports in advance of or
    concurrent with its invoices.
  • The programmatic reports should be directly
    related to the terms of the contract.
  • Access to Records/Right to Audit Clauses
  • Agencies have a responsibility to verify the
    information that the vendor reports to them and
    to ensure that funds are expended properly.
  • The contract must include an agreement that the
    agency has access to and can audit those records.

Implementing An IT Governance Structure
  • Identify Key Decision Makers and Take the Time To
    Cultivate Their Support
  • The Secret to Managing Is to Keep the Ones Who
    Hate You Away From the Ones Who Are Undecided
    Casey Stengel
  • Establish An Owner for IT Governance and Leverage
    Existing Activities

Implementing An IT Governance Structure
  • Communicate the IT Governance Vision
  • Announcements from Governor and Legislative
  • Formal Committees
  • Relationship Managers
  • Web Based Communications

  • Russell W. Hinton
  • State Auditor
  • State of Georgia
  • hintonrw_at_audits.ga.gov
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