A Legislative Perspective on Information Technology Budgeting

1
A Legislative Perspective on Information
Technology Budgeting

• Presented to IPMA
• October 1, 2007

2
Budget Overview

• The Constitution requires legislative
  appropriation made by bill, before any funds may
  be paid from the state treasury. (Article 8,
  Section 4).
• A budget bill is similar to other legislation
  (with a few exceptions). It must follow the same
  process (i.e., vote requirements, subject to
  amendments, etc.) and rules (veto, scope/object,
  etc.).
• The Legislature typically adopts three budgets
• Operating
• Capital
• Transportation
• Appropriations can be contained in other
  legislation (but that happens infrequently).

3
The Legislature

• Two chambers House (98 members) and Senate (49
  members).
• Any member can introduce a bill.
• The Legislature typically conducts much of its
  work in committees.
• Ways Means (Senate) deals with the Operating
  Budget.
• Appropriations (House) deals with the Operating
  Budget. (This work is also done by two
  Appropriations subcommittees General Government
  Audit Review and Education)
• Any member can propose amendments on the floor
  and any committee member can propose amendments
  in committee.
• Sessions
• 105 Day in odd numbered years
• 60 Day in even numbered years

4
Budget Process Timelines

• Oct 07 - Agency request due to OFM
• Dec 07 - Govs 2008 supplemental released
• March 08 - Legislature adopts 2008 supplemental
• Spring 08 - Agencies begin working on 2009-11
  request
• Aug/Sept 08 - 2009-11 Agency Request due to OFM
• Dec 08 - Govs 2009-11 Budget released
• April 08 - Legislature adopts 2009-11 Budget
• Copies provided to the Legislature

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Based on my observations, members tend to ask

• What is the problem being addressed?
• Will this solve the problem?
• What good things will happen if this is funded
  (or bad things if it is not)?
• Is the proposal likely to meet expectations if
  funded?
• Are there other (more?) cost effective approaches
  available?
• Are there any other decisions linked to this
  (either required, mutually exclusive, or enabled)?

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Observations About the 2007 Session

• Any GFS or related proposal had to compete with
  all other proposals.
• Very large projects (HRMS, OMNI, ProviderOne)
  have had issues in recent years.
• By my count, the Governor proposed more than 140
  IT related projects or items totaling 343
  million (all funds).
• Many of the items were related to the web.
  Others were GIS. Others were equipment. Some
  were large and some were small.

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Is the state making the most of any/all
investments in Information Technology

• Is there sufficient organizational capacity in
  each agency requesting funding for a project?
• Is the project the best solution for the problem?
• Has the project proposal been fully developed?
• How does the proposal compare to other IT related
  requests?
• Are we leveraging knowledge, experience and
  common infrastructure? Can we do more?
• Can we do more from an enterprise approach?
• What do other states do?

8
What did the Legislature do?

• Short Term
• Continued project oversight requirements for
  certain projects. Sec. 901
• Continued video telecommunication oversight
  requirements. Sec. 904
• Added a provision requiring consultation on
  Enterprise Services. Sec. 903
• Created the IT Project Pool. Sec. 1621

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What did the Legislature do?

• Long Term
• The Legislature finds that opportunities are
  being missed to use the expertise in the
  Department of Information Services and to
  leverage the purchasing power of the department
  to drive down the cost of securing information
  services. Sec. 962 (1)
• Establish a statewide workgroup to examine
• Statewide information services strategy
• Approval and oversight process of IT projects
• Leveraging DIS
• Strengthening the role of the ISB
• Opportunities to provide cost efficient
  equitable access to digital resources
• Approaches used in other states.
• Report due December 1, 2007

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Appendix Selected Information Technology
Provisos in SHB 1128
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Section 902 - Information Systems Projects.

•  Sec. 902   INFORMATION SYSTEMS PROJECTS.
  Agencies shall comply with the following
  requirements regarding information systems
  projects when specifically directed to do so by
  this act.     (1) Agency planning and decisions
  concerning information technology shall be made
  in the context of its information technology
  portfolio. "Information technology portfolio"
  means a strategic management approach in which
  the relationships between agency missions and
  information technology investments can be seen
  and understood, such that Technology efforts are
  linked to agency objectives and business plans
  the impact of new investments on existing
  infrastructure and business functions are
  assessed and understood before implementation
  and agency activities are consistent with the
  development of an integrated, nonduplicative
  statewide infrastructure.     (2) Agencies shall
  use their information technology portfolios in
  making decisions on matters related to the
  following     (a) System refurbishment,
  acquisitions, and development efforts     (b)
  Setting goals and objectives for using
  information technology in meeting
  legislatively-mandated missions and business
  needs     (c) Assessment of overall information
  processing performance, resources, and
  capabilities     (d) Ensuring appropriate
  transfer of technological expertise for the
  operation of any new systems developed using
  external resources and     (e) Progress toward
  enabling electronic access to public
  information.     (3) Each project will be
  planned and designed to take optimal advantage of
  Internet technologies and protocols. Agencies
  shall ensure that the project is in compliance
  with the architecture, infrastructure,
  principles, policies, and standards of digital
  government as maintained by the information
  services board.     (4) The agency shall produce
  a feasibility study for information technology
  projects at the direction of the information
  services board and in accordance with published
  department of information services policies and
  guidelines. At a minimum, such studies shall
  include a statement of (a) The purpose or
  impetus for change (b) the business value to the
  agency, including an examination and evaluation
  of benefits, advantages, and cost (c) a
  comprehensive risk assessment based on the
  proposed project's impact on both citizens and
  state operations, its visibility, and the
  consequences of doing nothing (d) the impact on
  agency and statewide information infrastructure
  and (e) the impact of the proposed enhancements
  to an agency's information technology
  capabilities on meeting service delivery
  demands.    

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Section 902 - Continued.

•      (5) The agency shall produce a
  comprehensive management plan for each project.
  The plan or plans shall address all factors
  critical to successful completion of each
  project. The plan(s) shall include, but is not
  limited to, the following elements A description
  of the problem or opportunity that the
  information technology project is intended to
  address a statement of project objectives and
  assumptions a definition and schedule of phases,
  tasks, and activities to be accomplished and the
  estimated cost of each phase. The planning for
  the phased approach shall be such that the
  business case justification for a project needs
  to demonstrate how the project recovers cost or
  adds measurable value or positive cost benefit to
  the agency's business functions within each
  development cycle.     (6) The agency shall
  produce quality assurance plans for information
  technology projects. Consistent with the
  direction of the information services board and
  the published policies and guidelines of the
  department of information services, the quality
  assurance plan shall address all factors critical
  to successful completion of the project and
  successful integration with the agency and state
  information technology infrastructure. At a
  minimum, quality assurance plans shall provide
  time and budget benchmarks against which project
  progress can be measured, a specification of
  quality assurance responsibilities, and a
  statement of reporting requirements. The quality
  assurance plans shall set out the functionality
  requirements for each phase of a
  project.     (7) A copy of each feasibility
  study, project management plan, and quality
  assurance plan shall be provided to the
  department of information services, the office of
  financial management, and legislative fiscal
  committees. The plans and studies shall
  demonstrate a sound business case that justifies
  the investment of taxpayer funds on any new
  project, an assessment of the impact of the
  proposed system on the existing information
  technology infrastructure, the disciplined use of
  preventative measures to mitigate risk, and the
  leveraging of private-sector expertise as needed.
  Authority to expend any funds for individual
  information systems projects is conditioned on
  the approval of the relevant feasibility study,
  project management plan, and quality assurance
  plan by the department of information services
  and the office of financial management.     (8)
  Quality assurance status reports shall be
  submitted to the department of information
  services, the office of financial management, and
  legislative fiscal committees at intervals
  specified in the project's quality assurance
  plan.

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Section 903 - Enterprise Services.

• Sec. 903   INFORMATION TECHNOLOGY ENTERPRISE
  SERVICES. Agencies may make use of the department
  of information services when acquiring
  information technology services, products, and
  assets.     "Information technology services"
  means the acquisition, provisioning, or approval
  of hardware, software, and purchased or personal
  services provided by the department of
  information services.     If an information
  technology enterprise service is provided by the
  department, or an agency has a specific
  requirement to acquire hardware, software, or
  purchased or personal services directly, the
  agency shall consult with the department of
  information services.

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Section 904 - Video telecommunications.

• Sec. 904   VIDEO TELECOMMUNICATIONS. The
  department of information services shall act as
  lead agency in coordinating video
  telecommunications services for state agencies.
  As lead agency, the department shall develop
  standards and common specifications for leased
  and purchased telecommunications equipment and
  assist state agencies in developing a video
  telecommunications expenditure plan. No agency
  may spend any portion of any appropriation in
  this act for new video telecommunication
  equipment, new video telecommunication
  transmission, or new video telecommunication
  programming, or for expanding current video
  telecommunication systems without first complying
  with chapter 43.105 RCW, including but not
  limited to, RCW 43.105.041(2), and without first
  submitting a video telecommunications expenditure
  plan, in accordance with the policies of the
  department of information services, for review
  and assessment by the department of information
  services under RCW 43.105.052. Prior to any such
  expenditure by a public school, a video
  telecommunications expenditure plan shall be
  approved by the superintendent of public
  instruction. The office of the superintendent of
  public instruction shall submit the plans to the
  department of information services in a form
  prescribed by the department. The office of the
  superintendent of public instruction shall
  coordinate the use of video telecommunications in
  public schools by providing educational
  information to local school districts and shall
  assist local school districts and educational
  service districts in telecommunications planning
  and curriculum development. Prior to any such
  expenditure by a public institution of
  postsecondary education, a telecommunications
  expenditure plan shall be approved by the higher
  education coordinating board. The higher
  education coordinating board shall coordinate the
  use of video telecommunications for instruction
  and instructional support in postsecondary
  education, including the review and approval of
  instructional telecommunications course
  offerings.

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Section 962 - Information Services Work Group.

• Sec. 962   (1) The legislature intends to
  improve the administration and coordination of
  state information technology. The legislature
  finds that opportunities are being missed to use
  the expertise in the department of information
  services and to leverage the purchasing power of
  the department to drive down the cost of securing
  information services.     (2) The office of
  financial management, the department of
  information services, and the legislature shall
  form a 2007 interim workgroup on improving state
  strategies, administration, and coordination of
  information technology. The workgroup shall
  consist of     (a) The director or designee of
  the department of information services, and the
  director or designee of the office of financial
  management     (b) A member of the information
  services board     (c) Two members of the
  senate, appointed by the president of the senate,
  one member from each of the two largest caucuses
  of the senate     (d) Two members of the house
  of representatives, appointed by the speaker of
  the house, one member from each of the two
  largest caucuses of the house of
  representatives     (e) The workgroup shall
  invite representatives of the following to
  participate     (i) One large state
  agency     (ii) One small agency     (iii)
  The state board for community and technical
  colleges     (iv) The state library     (v) A
  research university     (vi) A regional
  university and     (vii) Two members of the
  public.     (f) The workgroup shall choose its
  cochairs from among its legislative
  membership.     (3) The workgroup shall review
  the following issues     (a) A statewide
  information services strategy     (b) The
  approval and oversight process of information
  technology projects     

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Section 962 - Continued.

•        (c) Leveraging the expertise and
  purchasing power of the department of information
  services     (d) Strengthening the role of the
  information services board in enhancing the
  utilization of services offered by the department
  of information services and     (e)
  Opportunities to provide cost efficient and
  equitable access to digital resources, including
  online databases, for faculty and students at
  public institutions of higher education, state
  employees, and the public.     (4) As part of
  its review, the workgroup shall consider
  approaches used in other states to achieve its
  goals.     (5) Staff support for the workgroup
  shall be provided by the senate committee
  services, the house of representatives office of
  program research, the office of financial
  management, and the department of information
  services.     (6) Legislative members of the
  workgroup shall be reimbursed for travel expenses
  in accordance with RCW 44.04.120.     (7) The
  task force shall report its findings and
  recommendations to the governor and the
  appropriate committees of the legislature by
  December 1, 2007.     (8) This section expires
  December 31, 2007.

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Section 1621 - Project pool.

• Sec. 1621   A new section is added to 2005 c 518
  (uncodified) to read as followsFOR THE OFFICE
  OF FINANCIAL MANAGEMENT--TECHNOLOGY
  FUNDINGGeneral Fund--State Appropriation (FY
  2007) . . . . . . . . . . . . 26,277,000Special
  Technology Funding Revolving AccountAppropriation
  (FY 2008) . . . . . . . . . . . .
  37,964,000          TOTAL APPROPRIATION . . . .
  . . . . . . . . 64,241,000     The
  appropriations in this section are provided
  solely for deposit to and expenditure from the
  data processing revolving account and are subject
  to the following conditions and
  limitations     (1) The appropriations in this
  section, for expenditure to the data processing
  revolving account, are to be known as the
  "information technology funding pool" and are
  under the joint control of the department of
  information services and the office of financial
  management. The department of information
  services shall review information technology
  proposals and work jointly with the office of
  financial management to determine the projects to
  be funded and the amounts and timing of release
  of funds. To facilitate the transfer of moneys
  from dedicated funds and accounts, the state
  treasurer is directed to transfer sufficient
  moneys from each dedicated fund or account to the
  special technology funding revolving account,
  hereby created in the state treasury, in
  accordance with schedules provided by the office
  of financial management pursuant to LEAP Document
  ITA-2007 as developed by the legislative
  evaluation and program committee on April 20,
  2007, at 1301 hours.     (2) In exercising this
  authority, the department of information services
  and the office of financial management
  shall     (a) Seek opportunities to reduce
  costs and achieve economies of scale by
  leveraging statewide investments in systems and
  data and other common or enterprise-wide
  solutions within and across state agencies that
  include standard software, hardware, and other
  information technology systems infrastructure,
  and common data definitions and data stores that
  promote the sharing of information across
  agencies whenever possible     (b) Ensure
  agencies incorporate project management best
  practices and consider lessons learned from other
  information technology projects and     (c)
  Develop criteria for the evaluation of
  information technology project funding proposals
  to include the determination of where common or
  coordinated technology or data solutions may be
  established, and identification of projects that
  cross fiscal biennia or are dependent on other
  prior, current, or future related
  investments.    

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Section 1621 - Continued.

•      (3) In allocating funds for the routine
  replacement of software and hardware, the
  information services board and office of
  financial management shall presume that agencies
  should have sufficient funding in their base
  allocation to pay for such replacement and that
  any allocations out of these funds are for
  extraordinary maintenance costs.     (4) Funds
  appropriated in this section shall not be
  released for information technology projects with
  a risk-severity assessment level two or greater
  under the policies of the information services
  board until a feasibility study has been
  completed and approved by the information
  services board. If the feasibility study
  indicates a need for funding exceeding that
  allocated for the current biennium, justification
  of increased project costs shall be incorporated
  in an annual report from the department of
  information services to the information services
  board, the office of financial management, and
  the legislative evaluation and accountability
  program committee. Implementation funds shall not
  be released until the project is approved by the
  legislature.     (5) Funds in the 2007-09
  biennium may only be expended on the projects
  listed on LEAP Document IT-2007, as generated by
  the legislative evaluation and accountability
  program committee on April 20, 2007, at 1301
  hours. Future biennia allocations from the
  information technology funding pool shall be
  determined jointly by the department of
  information services and the office of financial
  management.     (6) Beginning December 1, 2008,
  and every biennium thereafter, the department of
  information services shall submit a statewide
  information technology plan to the office of
  financial management and the legislative
  evaluation and accountability program committee
  that supports a consolidated funding request. In
  alternate years, a plan addendum shall be
  submitted that reflects any modified funding pool
  request requiring action in the ensuing
  supplemental budget session.     (7) The
  department of information services shall report
  to the office of financial management and the
  legislative evaluation and accountability program
  committee by October 1, 2007, and annually
  thereafter, the status of planned allocations
  from funds appropriated in this section.     (8)
  State agencies shall report project performance
  in consistent and comparable terms using common
  methodologies to calculate project performance by
  measuring work accomplished (scope and schedule)
  against work planned and project cost against
  planned budget. The department of information
  services shall provide implementation guidelines
  and oversight of project performance
  reporting.     (9) The information services
  board shall require all agencies receiving funds
  appropriated in this section to account for
  project expenses included in an information
  technology portfolio report submitted annually to
  the department of information services, the
  office of financial management, and the
  legislative evaluation and accountability program
  committee by October 1st of each year. The
  department of information services, with the
  advice and approval of the office of financial
  management, shall establish criteria for complete
  and consistent reporting of expenditures from
  these funds and project staffing
  levels.     (10) In consultation with the
  legislative evaluation and accountability program
  committee, the department of information services
  shall develop criteria for evaluating requests
  for these funds and shall report annually to the
  office of financial management and the
  legislative evaluation and accountability program
  committee by November 1st the status of
  distributions and expenditures from this pool.

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The Current Biennium