A program to improve productivity and fiscal integrity for the Department of Fiscal Services of a state’s worker’s compensation insurance fund. The Cash and Banking Services Manager and the Fiscal Services Manager were the primary contacts for this engagement.
Project Overview
The charter for this engagement included a variety of deliverables:
- Development of a process flow chart documenting all banking and cash management activities of the Home Office Departments.
- Creation of desk level procedures for all Banking Services positions and activities.
- Automation of two related, but separate, systems within Banking: Stop Payments and Cancellations and Unclaimed Property.
- Implementation of a new data base system for managing Unclaimed Property, Stop Payments, and Cancellations.
- Automation of the annual escheatage to the State Controller.
- Streamlining of Banking processes in preparation for the desired installation of a network of personal computers.
- Conversion of Bank Reconciliation-related spreadsheets from one obsolete format to Lotus 1-2-3 and, later, to Microsoft Excel.
- Significant hands-on training in the new systems, processes, and procedures.
The objective was to improve the client’s banking-related processes. The scope included all areas of bank reconciliation, stop payments and cancellations, escheatage of unclaimed property to the State Controller, and communications with the twenty-four field offices, the Home Office Departments, and the three primary banks.
Project Results
The development of the process flow chart(s) and the desk level procedures was critical to the immediate and future automation efforts. They served as a basis for not only training current and future staff but also for identifying process improvement opportunities, including automation. The flow chart and the procedures were each updated as changes were implemented during the project.
The automation and streamlining efforts were directed at minimizing redundant data entry, eliminating keying errors, automating report creation, and enabling reconciliation of banking documents with general ledger documents. These areas included:
- converting spreadsheet formats to data base formats to enable on-line status of stopped, cancelled, and unclaimed items;
- developing detailed archive systems which could be maintained to provide an audit trail;
- coordinating with the two primary banks so that the client could be provided banking data via FTP rather than on paper (to eliminate manual keying and reduce cycle time by 67%);
- generating bank transmittals from the systems’ new data bases rather than relying on manual preparation of these transmittals (reducing the cycle time from days to minutes and eliminating several days monthly of manual labor); and
- creating a annual magnetic tape transmittal of Unclaimed Property to the State Controller’s Office from the new Unclaimed Property system rather than relying on the State Controller’s system (which required re-keying of data with an associated cost of several man-weeks annually).
Results included the ability to balance unclaimed property items to general ledger accounts; a foundation for future implementation of a local area network and for magnetic transfer of data between the client and its banks; and more timely reconciliation of bank accounts and production of banking-related reports.
Creation and review of written procedures resulted in significant operational changes for improved control, efficiency, and effectiveness.
The most immediate impact was in the area of fiscal integrity. However, the automation and streamlining allowed Fiscal Services management to implement and consider area staffing reductions of almost twenty percent with a budgeted dollar impact of approximately $150,000 annually.