Attachment D Pain Points.pdf

Pain Point Discussion Grant and Sub-Grant Management

• The State needs a standard approach for grant budgeting, accounting, and billing and to date has not been able to implement the SAP functionality. There is no consistency in how grants are accounted for.

• The Schedule of Expenditures for Federal Awards is compiled from spreadsheets collected from the Agencies.

• Sub-Grant Accounting varies from agencies to agencies, using different functionality (Earmarked Funds documents and MM Contracts to account for subgrants.

• CMIA reimbursement and interest is manually calculated

• Payment according to clearance patterns is left up to the agencies, resulting in interest payments to the Sponsoring Federal Agencies

Capital Assets • Currently using off book entries to complete Fixed Assets reporting in the Annual Comprehensive Financial Report

• Depreciation was configured and deployed before SAP Best Practices were standardized. Changes will be required to implement more comprehensive Fixed Asset Accounting consistent with Governmental Accounting Standards.

• Transfers of assets to new funds when old funds are retired is a manual time intensive effort

Travel • Never able to implement Travel Management

• Several stand-alone agency systems have evolved to compensate for lack of functionality

• There is no standard Travel Management Policy

• Agencies have developed specific Travel Policies that are more extensive than those enumerated by the Department.

Cost Allocations • SAP does not support cash basis allocations for Grant Accounting (i.e., the Warrant/Check must be posted before the cost can be allocated) SAP standard Allocations are based on modified accrual (i.e., the invoice must be entered before the cost can be allocated). A recent review of Agencies draw-down practices indicates that this requirement is not as inflexible as originally understood (i.e., if an invoice is entered within a number of days of the draw down and paid immediately, then the cost can be allocated).

• No agencies have implemented Cost Allocation in AASIS, although several agencies are allocating indirect costs outside AASIS in support of Grant, Total Costing and Internal Service Fund requirements.

Building Authority • Building Authority uses an Access database with no historical tracking for Lease Management.

• Building authority is using a custom application for Maintenance work orders and billing that is not integrated into AASIS.

• Need to expand footprint of Building Authority to include operational use of CLM Leases and Real Estate Management.

Inventory • Corrections and others could use more standard functionality than has been deployed (Meal Planning and Delivery, Integrated Inventory Management, Materials Requirement Planning)

• The only agency still using Inventory is DHS. Others are reporting as part of the year-end close closing book process.

Intra-/Interfund Activity

• Reconciling Operating Transfers and Settling Due-To/Due From are manually intensive processes.

• Cross fund type transfers are problematic

ACFR preparation • Not all ACFR Balances are maintained in AASIS, requiring several off-book entries (particularly in support of Full Accrual Accounting)

• Reconciliation between modified and full accrual is manual

• Agency participation in compiling the ACFR is spread sheet based and requires a lot of manual review and oversight to ensure compliance with reporting standards.

Transformation has confused the use of Business Areas

• Multiple Business Areas now report to a higher-level Cabinet structure.

Reporting at higher levels has not been addressed.

Functional Areas • Need to use for ACFR function, which has not been consistently done

• Currently using a custom table to map one Business Area to multiple Functional Areas

• Manual process is used for ACFR reporting by Functional Area

• The number of characters used for this field has expanded to 25 from the original 4 used at the original go-live. The Department has determined that it would like to explore this field for use in Activity Based costing during the upgrade project.

Long Term Debt • Would like to explore using SAP to account for Long-Term Debt as it occurs (including full accrual entries and amortization of same).

• Would like to use AASIS to update Transparency Web-site (Currently done manually)

High Degree of Customizations

• Many of the customizations have been baselined in SAP S/4HANA

On-Going Training • The state requires on-going training in support of the upgrade effort, for new users, and for future functionality roll-outs

• Will need to come up with a solution for providing this, including analyzing the feasibility of out-sourcing training after go-live

Transition to New Financial Data Classification/CoA

• Lack of knowledge of current S/4 structures needs to be addressed

• Current structures prevent Arkansas from using standard functionality o Cannot use FM Balance Carryforward because Many to 1 GL to CI

• Attachment E: Transition Strategy for Migrating from As-Is Financial Model to To-Be Financial Model documents a starting point for planning the cutover to existing, new or changing financial master data structures

Lack of Workflow • True workflow was not implemented.

• Classification Release strategies are used in Procurement as substitute

• Park and Post used for FI postings.

• Time approval in EASE (custom portal) use SAP organization structures and reporting relationships to route leave requests

Manual Month End Close processes

• Revenue Distribution via Spreadsheet

• Non-Treasury Bank Accounting has dropped off. Current process is not Open Item Managed. The Department would like to implement an automated bank reconciliation process for commercial bank accounts, not just Treasury.

Transition to new UNSPSC codes for procurement (and eventually Sales and Distribution)

• Original use of Materials pre-dates NIGP.

• The Office of State Procurement has designed a classification process that uses all four defined levels of the UNSPSC code structure and allows for expansion into a user-defined 5th level. As of the issuance of this RFP, the State has not transitioned to using this structure.

How will we meet new Accounting

• GASB is discussing expanding from the current ACFR reporting model to one that also reports on a Current Economic Resource Basis

Standards expected to coincide with S/4 go-live.

• This may be implemented soon after go-live and could need to be addressed in the first ACFR from AASIS S/4HANA

Plant Maintenance • There currently is no standard consistent method of for maintenance planning that is shared across agencies, is spite of the cross-agency nature of these activities. There is also no consistent approach for capturing maintenance costs in a way that supports data-driven decision making.