JFAC backs funding plan for state controller’s $102M upgrade of state’s business systems

The Legislature’s joint budget committee voted unanimously today in favor of legislation to set up a funding mechanism for a $102 million, five-year modernization of the state’s business systems, including statewide accounting, payroll and procurement systems. As proposed by state Controller Brandon Woolf and recommended by Gov. Butch Otter, the plan calls for redirecting money from the state’s indirect cost recovery fund to the project at the rate of $18 million to $22 million a year, starting this year. That fund, which agencies pay into for various central services they receive from the state, normally is transferred to the general fund at the end of the year, so the move has roughly a $20 million a year fiscal impact on the general fund.

Woolf told the joint committee today, “I cannot accept the increasing risk of our system failing and producing a scenario where we are unable to pay our employees or our bills, and I know you share that same resolve with me. We can and will realize great value for Idaho by modernizing, consolidating and standardizing business processes and financial information across state agencies, resulting in greater transparency of government to the Legislature and its citizenry.”

Lawmakers on the Joint Finance-Appropriations Committee had numerous questions, but all voted in favor of the plan, sending it in the form of a bill to the floor of the House. It still will need passage there and in the Senate and the governor’s signature to become law. Lead sponsors listed in the bill are Woolf, Otter, and JFAC Co-Chairs Sen. Shawn Keough, R-Sandpoint, and Rep. Maxine Bell, R-Jerome.

Keough told JFAC, “We’ve talked about what the needs are for this 30-year-old system which is one of the backbones of the state government fiscal system.”

Sen. Mary Souza, R-Coeur d’Alene, asked Woolf if he’d forecasted savings that would result from the modernization. “Once we are fully implemented and going, in year six, we would expect to see $8 million to $10 million in savings each fiscal year,” Woolf responded.

Lawmakers in 2015 appropriated money to begin the project with a system modernization study, which was completed by an independent consulting firm that also has done similar work for 18 other states. Woolf said the new system would continually update, and would be a “long-term solution” for the state.