Enterprise Resource Planning Project Analysis pg 1...Business Process Analysis and Recommendations March, 2017 Enterprise Resource Planning Project

BusinessProcessAnalysisandRecommendations

March, 2017

Enterprise Resource Planning Project

Business Process Executive Summary Apriant, Inc.

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S t r a t e g y ♦ P r o c e s s ♦ O r g a n i z a t i o n

Table of Contents

EXECUTIVE SUMMARY ................................................................................................................. 3

BUSINESS PROCESS MANAGEMENT GUIDING PRINCIPLES .................................................. 3

OUR METHODOLOGY .................................................................................................................... 4

Preparation ..................................................................................................................................... 4

Project Timeline .............................................................................................................................. 5

Preparing for the Effort .................................................................................................................. 6

As‐Is Process Analysis and To‐Be Scoping Sessions ........................................................................ 6

Process Recommendation Development ....................................................................................... 6

High Priority Business Processes .................................................................................................... 8

BUSINESS PROCESS RECOMMENDATIONS ........................................................................... 12

General / Overarching Observations ............................................................................................ 12

Accounting .................................................................................................................................... 14

Accounts Payable .......................................................................................................................... 15

Asset Management ....................................................................................................................... 17

Budget ........................................................................................................................................... 20

Finance – Position Management .................................................................................................. 22

Human Resources ......................................................................................................................... 23

Payroll ........................................................................................................................................... 25

Benefits ......................................................................................................................................... 27

Talent Management ..................................................................................................................... 28

Nutrition ....................................................................................................................................... 29

Procurement ................................................................................................................................. 31

Warehouse ................................................................................................................................... 34

NEXT STEPS ................................................................................................................................. 36

SUMMARY ..................................................................................................................................... 37


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Executive Summary The back office departments represented by Human Resources, Finance, Budget, Nutrition

Services, Warehouse perform roughly 300 separate processes and sub‐processes on a periodic

basis, using a combination of software systems, databases, spreadsheets and manual data entry.

These processes determine everything from the quality of each employee hired into the Shelby

County Schools, to the budgets that support their positions, to the supplies that they use and the

pay checks that they receive. These departments directly support the efforts of our school staff

to produce career ready graduates, and to increase student achievement and student

enrollment. The efficacy of the systems that these departments administer is paramount to

meeting the goals of the District.

In the spring of 2016, SCSD contracted Apriant, Inc. to lead a dedicated team of department

leaders through an analysis of 122 high‐priority business processes selected by each department.

The work of Apriant and the District team this has culminated in the delivery of this document of

business process recommendations.

This document makes succinct recommendations to process and strategy with several goals in

mind. The information from the interviews used to create this document and recommendations

that result, were used to form the basis for our RFP selection effort. The book itself will be given

to the departments and the implementer to provide guidance during the ERP project.

Business Process Management Guiding Principles The business process management approach that Apriant used to examine the business

processes at Shelby County School District focuses on improving the District’s business

processes to improve their in quality, cost, time management and more capable of adapting

to change. When completing our analysis and recommendations we based them on a

framework comprised of the following tenets:

Customer service oriented approach

Build controls into the process

Several jobs combined into one

Workers make decisions

Steps are performed in a natural order

Work is performed where it makes sense

Approvals are reduced

Reconciliation is reduced

Single point of contact


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Organize around outcome, not tasks

Capture information once at the source

Minimize non‐value adding activities

Ease of access to reliable, up‐to‐date data

Every process has a feedback loop for improvement

Our Methodology The team followed a multi‐step model to capture and analyze the process information and

generate the corresponding process recommendations, including project preparation, As‐Is

process analysis and documentation, To‐Be process recommendations and documentation.

Preparation SCSD PMO Office along with Apriant identified the business process owners for the key functional

areas that would be involved in the business process re‐engineering task of the ERP Assessment

project. The BPR (Business Process Re‐engineering) team was comprised of:

Angela Carr, Accounting

Sheila D. Gatson, Accounts Payable

Prepare for BPM

•Identify cross functional teams

•Identify District’s objectives

•Develop strategic plan

•Identify high priority processes

Map and Analyze As‐Is Process

•Meet and document as‐is process

•Identify process inefficiencies and bottlenecks

•Create Process Model (Visio)

Develop and Map Process Recommendations

•Meet and discuss suggested changes

•Create Process Model (Visio)

•Create Process Recommendation document

Implement Process Changes

•Changes implemented prior to and during ERP implementation

Continuous Improvement

•Continually review and improve processes


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Tammy Bradford, Asset Management

Aetna Smith, Budget

Aetna Smith, Finance

Rosa Gilmore, Finance‐Payroll

Loretta Poindexter, Human Resources ‐Benefits

Sheila Redick, Human Resources

Sieera Shaw, Human Resources

Felicia Freeney Ollie, Human Resources

Frank Cook, Nutrition

Jonathan Lawshe, Procurement

Ken White, Warehouse

Matt Knoepke, Consultant

David Williamson, Consultant

Brett McQuade, Consultant

Each BPR team member was responsible for pinpointing their high priority business processes

and their owners, as well as identifying the major areas of concern within their department’s

operation. The BPR task was also supported by “guest starts” who gave valuable input and aided

in documentation of process questionnaires and reviewing process recommendations.

Project Timeline The project began in February 2016, with the intent to complete analysis by the end of May. As

we analyzed and got more understanding of Shelby District processes, the consultants realized

that the issues with each process were far deeper and more complex than the current timeline

would allow. After a meeting with the Project Sponsor and the Superintendent’s Cabinet on 19th

May, the team adopted the following schedule:

Project Phases Start Date End Date

BPR Workshop 24‐Feb‐2016 25‐Feb‐2016

Distribute current process Questionnaire 26‐Feb‐2016 1‐Mar‐2016

Questionnaire filled and submission 2‐Mar‐2016 1‐Apr‐2016

Interviews with SCSD BP Owners 6‐Apr‐2016 8‐Apr‐2016

Analyze Survey and perform Gap Analysis 2‐Apr‐2016 15‐Apr‐2016

Create To‐Be Documentation 25‐Apr‐2016 26‐Aug‐2016


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Preparing for the Effort Our preparation for the effort involved establishing the team, the methodology, goals, and

timeline. We spend a good deal of time determining which business process we would deem

‘high priority’ that are critical and will help identify functional requirements to later use in

selecting a new ERP system. We also set up our project infrastructure (templates, tools,

technology), the expectations we had for ourselves (perseverance, collaboration, ownership,

mutual respect, pride, team support, continuous improvement), and the structure of

communication between the consultants and business process owners.

As‐Is Process Analysis and To‐Be Scoping Sessions In February 2016, and continuing through April of 2016, the business process owners filled in

process questionnaires, clarifying questions with their assigned Apriant Consultant via phone or

email. Apriant scheduled a three day BPR session in early April 2016 to meet and discuss the high

priority processes questionnaires documented by each of the business process owners.

Specifically, the process owners were asked to include:

Goal of the business process and how that goal adds significant business value to the

District

Process owner and customer

District systems and technologies utilized during the process

Any approvals or controls that exist and the reason for each

Steps executed during the process, including frequency, inputs, outputs, and total time.

Process inefficiencies and bottlenecks

The team used this information as a basis for discussion and rework. Our sessions focused heavily

on analyzing where each As‐Is process was weak or inefficient, and how to use technology, new

process or business process optimization to achieve our goals. The result of each session was an

outline of the process in an optimized state named the To‐Be.

Process Recommendation Development Once the interviews were complete, the team began the detailed analysis and documentation

for each To‐Be process. The goal of this segment of the project was to produce useable

recommendations and detailed documentation of those recommendations. In total, the team


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produced 122 documents encompassing 122 high priority business processes. Those documents

have been combined and included herein.


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High Priority Business Processes The process owners aided by Apriant, identified 122 high priority business processes to evaluate

during the BPR task. Recommendations have been provided for the following processes:

Accounting

ID Process Name Owner ACC001 Journal Entry Angela Carr

ACC002 Student Activity Accounting Angela Carr

ACC003 Warehouse GL Reconciliation Angela Carr

ACC004 Cash Receipting Angela Carr

ACC005 Customer Invoicing Angela Carr

ACC006 Asset Management CIP Angela Carr

ACC007 TDE Information State Reporting Angela Carr

ACC008 Invoice District Customer ‐ ASD Angela Carr

ACC010 Bank Reconciliation Angela Carr

ACC011 Expense Reimbursement Angela Carr

ACC012 Grant Receivable tracking and Revenue Recognition Angela Carr

ACC013 Month End Closing/Reconciliations Angela Carr

ACC014 Year End Closing/Reconciliations Angela Carr

ACC017 Customer Statements Angela Carr

ACC018 GL Encumbrance‐Payroll Accrual Process Angela Carr

Accounts Payable

ID Process Name Owner ACP001 Vendor Payments with Purchase Orders Sheila D. Gatson

ACP002 Vendor Payments without Purchase Orders Sheila D. Gatson

ACP005 Batch Check Printing Process Sheila D. Gatson

ACP008 Scanning Invoices Sheila D. Gatson

ACP009 Copier Invoices Sheila D. Gatson

Asset Management

ID Process Name Owner AST001 Asset Disposal Tammy Bradford

AST002 Asset Reconciliation Tammy Bradford

AST003 Asset reporting Tammy Bradford

AST004 Create Asset Tammy Bradford

AST005 Asset Depreciate and Redistribution Tammy Bradford

AST006 Track and analyze assets Tammy Bradford


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AST007 Company Property Administration Tammy Bradford

Budget

ID Process Name Owner BUD001 Grant Budgets Aetna Smith

BUD002 Create Original Budget Aetna Smith

BUD003 Maintain Chart of Accounts Aetna Smith

BUD004 Process Budget Amendments/Transfers/Exceptions Aetna Smith

BUD005 Grant Rollover Aetna Smith

BUD006 Control Accounts Aetna Smith

Finance

ID Process Name Owner FIN001 Position Encumbrance Aetna Smith

FIN002 Position Budgeting Aetna Smith

Finance ‐ Payroll

ID Process Name Owner PAY001 FLSA Processing Rosa Gilmore

PAY003 Leave Accrual Processing Rosa Gilmore

PAY004 Off‐Cycle Payroll Rosa Gilmore

PAY005 Overpayments Rosa Gilmore

PAY006 TN Retirement Processing and Reporting Rosa Gilmore

PAY007 Quarterly Tax Reporting (941) Rosa Gilmore

PAY008 Retroactive Payroll Rosa Gilmore

PAY009 Workshops and After‐School Programs Rosa Gilmore

PAY011 Check Reversals, Adjustments, and Reprints Rosa Gilmore

PAY012 On Demand Checks Rosa Gilmore

PAY013 On‐cycle Payroll Processing Rosa Gilmore

PAY014 Voluntary General Deductions Rosa Gilmore

PAY015 Garnishments Rosa Gilmore

PAY016 Year End W2 and Tax Processing Rosa Gilmore

Human Resources and Benefits

ID Process Name Owner BEN001 COBRA Administration Loretta Poindexter

BEN002 Benefits Enrollment (including Qualifying Events) Loretta Poindexter

BEN003 Benefit Billing Loretta Poindexter

BEN004 Benefits Reporting Loretta Poindexter


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BEN005 Benefits Terminations Loretta Poindexter

BEN006 FMLA Loretta Poindexter

BEN007 Retroactive Benefits Loretta Poindexter

BEN008 Benefits Reconciliation Process Loretta Poindexter

BEN009 Affordable Care Act Loretta Poindexter

BEN010 Annual Enrollment (Open Enrollment) Loretta Poindexter

BEN011 Leave of Absence (without Pay and Benefits) Loretta Poindexter

BEN012 Retirement Tracking Loretta Poindexter

BEN013 Return Employee from Leave Loretta Poindexter

HRM001 Certification, Credential Tracking and Highly Qualified Sheila Redick

HRM002 Salary Schedule Sieera Shaw

HRM003 Employee Evaluations Sheila Redick

HRM004 Teacher Evaluations Sheila Redick

HRM005 Employment Verification(I‐9) Felicia F. Ollie

HRM006 Generate and Maintain Contracts Sheila Redick

HRM007 RIF (Bumping and Layoff) Sheila Redick

HRM008 Reemployment Process Sheila Redick

HRM009 Personnel Actions Felicia F. Ollie

HRM010 Substitute Processing‐Smartfind Express Sheila Redick

HRM011 Stipends Sieera Shaw

HRM012 TDE State Reporting Felicia F. Ollie

HRM013 Certified Employee Hiring Sheila Redick

HRM015 Classified Employee Hiring (include Administrative Hiring) Sheila Redick

HRM016 Job Requisition Process Sheila Redick

HRM017 Prepare Job Postings Sheila Redick

HRM019 Onboarding Process Sheila Redick

HRM020 Employee Self‐Service Felicia F. Ollie

HRM021 Employment Verification Felicia F. Ollie

HRM022 Position Management (include budget) Sheila Redick

HRM023 Rehire Sheila Redick

HRM024 Salary Planning and Step Increment Process Sieera Shaw

HRM025 Terminate Employee Sheila Redick

HRM026 Exit Interviews and Checklist Sheila Redick

HRM027 EEO Tracking Reporting Felicia F. Ollie

HRM028 Voluntary Transfer Process Sheila Redick

HRM029 Background Checks Sheila Redick

HRM030 Disciplinary Action Case Management Sheila Redick


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HRM032 Finger Printing (Live Scan) and ID Processing Sheila Redick

HRM033 Update Sick/Vacation Balances Felicia F. Ollie

Nutrition

ID Process Name Owner NUT002 Time Reporting( Interface Nova Time and Payroll) Frank Cook

NUT003 Nutrition Services PO and Receipt Frank Cook

Procurement

ID Process Name Owner PRC001 Blanket Purchase Orders and Service Contracts Jonathan Lawshe

PRC002 Standard Purchase Order Processing Jonathan Lawshe

PRC003 Establish a Vendor Record Jonathan Lawshe

PRC004 Receiving Non‐Inventory Items Vendor Deliveries Jonathan Lawshe

PRC005 Purchase Order Year‐End Process Jonathan Lawshe

PRC006 Expediting Purchase Orders Jonathan Lawshe

PRC007 Consultant Contracts Jonathan Lawshe

PRC008 Funds Availability Checking ‐ Requisitions Jonathan Lawshe

PRC009 Maintenance Purchasing Jonathan Lawshe

PRC010 PO Change orders Jonathan Lawshe

PRC011 Purchase Order Processing Jonathan Lawshe

PRC012 Purchase Requisition (goods and services) Jonathan Lawshe

PRC013 Purchase Requisition (inventory items) Jonathan Lawshe

PRC014 Requisition Approval Workflow Jonathan Lawshe

PRC016 Purchase Order Rollover Jonathan Lawshe

PRC017 Bid Management Jonathan Lawshe

PRC018 Create and Issue Request for Quote Jonathan Lawshe

PRC019 AP 1099 Processing Jonathan Lawshe

PRC021 Vendor Management ‐ Non Employee Jonathan Lawshe

Warehouse

ID Process Name Owner WRH001 Warehouse Replenishment Process Ken White

WRH002 Warehouse Inventory Counts Ken White

WRH003 School Stock Requests Ken White

WRH004 Receiving (and Put away) Stock Ken White

WRH005 Inventory Item Management (add/update) Ken White

WRH006 Fuel Interface Ken White


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Business Process Recommendations General / Overarching Observations

District schools and departments have had to weather a series of system changes

resulting from the district merger with the county and the subsequent split. The end

result is the District being left with a financial management system which is undersized to

handle the volume of transactions or to provide the functionality required to operate a

very large school district. System limitations drive the requirement to augment system

functionality by implementing supporting systems to meet the District needs. While

these supporting systems may address a need, they bring with them the added

complexity of managing multiple system access methodologies, confuse the notion of

which system is truly the system of record, and increase the workload significantly based

upon the need for redundant data entry. Redundant data entry is not only inefficient; it

is always prone to errors created when employees are expected to create identical data

in more than one place

Currently, the district relies heavily on paper‐based processes. The reliance on paper is a

direct result of the system of record, APECS, lacking common controls, lacking sufficient

functionality to support complicated business processes and in many cases to even

provide simple notification when accounts are out of balance, processes lag or batch

processes fail

The supporting systems, in most cases, are required to actually complete the work of the

District. However, these systems have been implemented apparently with little or no

Information Technology Department involvement. Simple, but time‐saving, consideration

to electronic integration between the supporting system(s) and APECS is largely non‐

existent and may even be impractical. Standardization of data elements, such as vendor

number, student ID or item number between systems would allow data to be moved

easily between systems, would expedite processing and would eliminate many manual

efforts. This issue begs for a data governance model to be developed and rigorously

enforced

Approvals by way of signatures on paper forms occur on multiple levels regardless of the

type of transaction. This is necessitated by the lack of controls inherent in the APECS

system. Simple account validation, encumbering funds, access to data, prior year lock

out, integration between modules such as position control and budget, and many other

functions that would safeguard data integrity are largely nonexistent

When interviewed, employees spoke often about processes taking too many touches to

complete. When a paper‐based process is combined with a multi‐tier approval process,


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the result is significant delay from initiation to actual execution. Additionally, when the

paper has to be routed from person to person, it is easily lost, ignored, misfiled or

forgotten further compounding the processing delay which ultimately impact classroom

and business functions in negative ways

Major staff reductions have occurred in the Central Office which have not been offset by

increased system functionality

There are numerous software update or replacement initiatives that are either currently

underway or under consideration that need to be coordinated and scheduled so as not to

overload schools and departments to the point of implementation failure. It was noted

that the Student Information System is being upgraded or replaced, that the Nutrition

system is being upgraded or replaced, that NovaTime is being implemented, and that

there is a desire to replace SchoolFundsOnline in addition to the potential replacement

of the ERP system. Any one of these initiatives is a major undertaking which needs to be

planned, executed, and implemented with full consideration given to the impact on staff,

budget, and district operations

The next few sections is a synopsis of high‐level findings from each functional area with

recommendations for process improvement. More details are documented in the individual

business process, both in the current (As‐Is) and future (To‐Be) state.


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Accounting The central district accounting group takes care of all month‐end and year‐end processes,

reviews and enters journal entries, processes cash receipts, creates invoices for leases and ASD

support, handles Grant tracking and revenue recognition, and tracks CIP work.

Month‐End Close

One of the most glaring concerns with the accounting group and APECS is the fact that a closed

period is still open to receive accounting activity. APECS does not stop accounting entries from

posting into periods that SCSD consider to be closed. Obviously, this makes creating a set of

financial reports for a period extremely difficult. Any new ERP system will need to support

calendar structures, ledgers and processes that allow for a period to be closed and thus no new

activity can post to that period.

Reconciliations

The reconciliation processes for the central accounting group are very robust, very manual, Excel

and Access dependent, and all too often occur outside the system of record. Several of the

reconciliation processes are a result of SCSD having no direct control/access of their cash balance

or check distribution process because the County Trustee sweeps all deposits and pays on‐

demand all warrants. Reconciliations include GL‐Warehouse, Depository with the Bank, and

Accounts Payable with the Bank, Cash Receipting with the Trustee, Payroll with the Bank and

Trustee Reconciliation of all cash‐in/cash‐out. Some of these reconciliation processes take as

long as four days to complete. Any new ERP system needs to have the ability to accept files from

such external systems and automatically reconcile within the ERP system.

Budgets

Budgeting is currently done outside the GL within spreadsheets. Any new ERP system should

have an integrated budgeting tool which allows for the creation of budgets within the ERP

system, the modification to those budgets while still planning and not approved, and then

lockdown of those budgets once budget development is complete. Changes to approved budgets

should be made within the ERP system using budget journal adjustment entries. Actuals should

be validated against the approved budgets within the ERP system without any human review.

The budget system should provide the flexibility to budget by monthly periods, quarters, semi‐

annually, annually and for projects, multiple annual budgets.


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Accounts Payable The accounts payable group within SCSD focuses on paying vendors promptly for services

performed or goods delivered. For services, Accounts Payable ensures the invoice correctly

matches the contractual obligations of the services contract, and for items delivered, Accounts

Payable makes sure the items were properly received and that the Purchase Order line, receipt

and Invoice match (3‐way match) prior to issuing the warrant.

V‐Card Processing

The v‐card process, which is the placement of invoice payments on a type of “debit” card that

can be used by the vendor, is a process the district should consider eliminating. The AP group

spends too much time reminding vendors to spend down their v‐card balances, re‐issuing

payments to v‐cards and issuing new v‐cards for vendors who have lost them. Payments to

vendors should be either check or EFT. It would seem reasonable that Regent bank would be

willing to open accounts for vendors and issue them debit cards. In this way, funds not spent

would remain in the account and not lapse.

Vendor Maintenance

Typically, vendor setup and maintenance is handled by the AP group within the organization, but

at SCSD, purchasing controls the vendor setup and maintenance process. The fact that

purchasing does this is not necessarily an issue, but many ERP system are configured with all

vendor processes within the AP module, so if SCSD wants to continue such an organizational

setup, the persons with the purchasing group will need access to functionality typically not within

their area.

Payment Processing

The AP group for SCSD does not generate the actual payments to vendors. Instead, they produce

a warrant file three times a week and upload the file to Regent Bank which does the check run

and envelope stuffing. I could not determine if this was a cost reduction for SCSD, a security

measure, or a fiduciary control policy. In any case, one of the most important roles of the AP

group is not handled in‐house and so does create some issues around pulling errant checks post

run or holding checks for some reason.

The AP Direct Pay process is another area that should be streamlined. Direct payment for a

vendor for services/goods under $500 without a purchase order should be an electronic invoice

submission that is reviewed by the AP staff, not a paper form. This type of invoice would not


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need to be matched. Reimbursements for personnel expenses, travel, etc. should all go through

Payroll, not AP. Going through AP results in the unnecessary creation of many “vendors” which

are really employees and likely does not withhold the correct amount of tax for personal

reimbursements.


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Asset Management AMSI/APECS

The District utilizes two separate systems for the maintenance and processing of Fixed Assets.

AMSI is a school facing application that allows for school sites to make asset acquisition or

disposal requests as well as allow the school‐based staff to manage asset inventory. APECS is the

system of record for all District financial transactions and where all of the G/L accounting is

conducted including G/L transactions for assets. The user interface to APECS is considered to

lack friendliness and isn’t liked by the user community. There is no system‐level interface or

integration between the two systems. As a result, data integrity is questionable. Even with two

systems in place, the current process is still heavily paper driven, requiring someone to fill out a

form, route the form, get approval for the form, get approval for the approval, all before anything

ever actually happens all while hoping that no one takes a vacation, allows the form to sit on a

desk, or leaves their position.

At the time of the interview over 4,000 entries in AMSI were awaiting approval. The approval

process requires verification of all asset information including bar code, serial number, asset

description, PO number, and price. All of this information is available in APECS and should not

need to be verified if APECS had the necessary functionality to properly handle fixed asset record

keeping. The current process requires all of this information to be hand entered into AMSI,

verified, downloaded, uploaded to APECS, and then sent back to AMSI.

The APECS software will not accept an alphanumeric asset numbers but AMSI will. This causes

issues with importing/exporting data from APECS to AMSI or vice versa especially if the asset is

initially captured in AMSI.

Asset Inventory

The collection of asset inventory data is problematic on a number of levels. When an asset is

purchased through the normal procurement process, there is no automated link between the

purchasing system and the asset management system to automatically record the new asset.

The process relies on multiple employees to ensure the assets that are purchased are actually

added to the asset inventory properly. The legacy MCS barcode data was lost during the merger

and the subsequent split rendering the current asset inventory incomplete.


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Asset Tagging

Schools, vendors, certain departments, and the Office of Asset Management all have asset tags

which can be affixed to an asset upon purchase. To help conduct asset inventories, schools have

been provided scanners. However, other sites as well as central administration haven’t been

given the same equipment. Therefore, for this reason alone, it is difficult to complete a district‐

wide inventory. In addition, the District is also an LEA for several Charter and Private school. As

such, the District is responsible for tagging and tracking assets for those locations when in fact

the District may not even purchase the items nor receive them for tagging.

Vendors submit most asset information (asset description, serial number, bar code number) in

paper format rather than electronically. The data then must be hand entered in AMSI. Many

assets have multiple asset ID tags. As an example, one computer was witnessed with three

separate asset ID tags with two different asset IDs. This leads to confusion and a loss of data

integrity. The asset could easily be recorded in the fixed asset system multiple times. Some

assets, including furniture, are not tagged and are not tracked in either APECS or AMSI.

General Processing

Inconsistent processing will yield inconsistent results. From asset tagging to asset disposal, there

are multiple ways to complete each process. Standardization and consistency are the key to an

accurate inventory. The Office of Asset Management does not perform the process of

depreciating assets on a yearly basis and relies upon the Finance Department to do so. With

notably incomplete data, it is obvious depreciation is also inaccurate and not fully accounted for.

Thefts are supposed to be reported to Risk Management, Security and the Office of Asset

Management but are often overlooked or unreported until a physical inventory identifies a

missing asset.

Recommendations

Start Anew: There is more than ample confusion regarding which asset tag is the real tag,

whether asset data has or hasn’t been converted from prior systems, which asset data is valid,

and whether or not the asset data has even been captured, to justify starting from scratch with

a holistic approach, tighter controls, leaner processes and a new wall‐to‐wall, building by building

inventory. For example, there was mention of a spreadsheet that comes from somewhere with

item numbers and descriptions, admission that food service equipment isn’t reliably inventoried,

that only part of Career and Tech Education equipment is in the inventory, and a lack of

confidence that the data collected over several years had been converted to APECS from prior


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systems. All of these raise serious questions to the integrity of the current data and collectively

justify a fresh start.

Implement a single system: With multiple systems tracking the assets from differing

perspectives, it’s impossible to believe the asset inventory is accurate at any point in time. Then

consider the fact, the purchase process is decoupled from the asset management process and

you have even less hope of keeping and maintaining accurate asset data. A new user‐friendly

system with tight integration between asset management and procurement is required to

replace the functions of both APECS and AMSI. A less desirable but potentially feasible solution

would be to implement a more robust asset management system outside of APECS and then

develop strong integrations with the ERP system thereby eliminating redundant data entry while

keeping the systems in sync.

Reporting: Reporting needs to be provided to identify exceptions, new asset additions, asset

changes, and to identify active vs. inactive assets. Asset Management personnel are currently

left to create their own reports from Access or Excel and must create their own calculations as

well. This needs to be systematized to make it repeatable and to eliminate any potential

calculation errors.


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Budget Lack of Budget

With a General Fund budget of approximately one billion dollars and a total budget across all

funds far exceeding that amount, the district does not have a software system that allows them

to build and manage those funds and must rely on common Access and Excel, for budget

preparation. While both are robust tools, together they do not provide a system of checks and

balances, audits, reporting, or trending as needed to closely manage district funds. Furthermore,

this means there is not an explicit tie between budgeted dollars and position control where the

bulk of the district funds are expended.

This lack of software is mitigated in part by having multiple layers of budget approval required

before any amendment or transfer can occur. Each amendment requires the creation of two

documents—a narrative explaining the rationale and a spreadsheet with the budget numbers

which is used to upload the change(s) to APECS.

Position Control VS. Budget

With principals having autonomy over their budgets and their staff, they can make decisions

during the budgeting process to shift staff or change a staffing model as long as the total dollars

supposedly remain the same. Without clear ties to position control, individual employees can be

moved to positions they are not qualified for or they may be left looking for a position. Principals

could also conceivably make changes that puts the district out of compliance with pre‐K, federal,

or Special Ed staffing requirements. There is no systemic link between the budgeting process

and the hiring process. The only reason this hasn’t become a large issue is because there are so

many open positions that a budgetary cushion is created which absorbs overages in aggregate.

Position control in APECS must be updated manually from the data contained in the Budget

Department’s access database.

Control Accounts

Hard to explain and difficult to understand, the concept of control accounts was created in an

attempt to streamline the process of managing a budget centrally but needing to account for it

on a detailed site‐by‐site basis. Funds are budgeted in a single 9999 account but expenditures

are recorded in multiple 9998 accounts. A problem arises from the fact that there is no systemic

link between the 9998 and the 9999 accounts. That link only exists through the knowledge of

those using the system. The end result is confusion by users that don’t understand. They will


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see a remaining budget balance in a 9999 account and not realize the funds had already been

expended in a 9998 account.

Confusion also arises for budget managers that want to make changes in their accounts especially

when a budget manager will have multiple 9999 accounts and wants to rearrange the funds

among them.

Recommendations

Software: The biggest single issue to resolve is the lack of software to manage a billion‐dollar

budget. Ideally, the software should be a module of the ERP system with ties to the G/L, Human

Resources, and Position Control. Budget Planning should be based upon ERP data, actual position

data, and presented with the knowledge of the actual working environment. Continuation of the

current methods are both inefficient and dangerous in that they rely upon human memory and

non‐systemic methods of calculating budgetary amounts.

Control Accounts: This issue is extremely complicated because there isn’t a true link between

budget and the actual expenses. Rethinking the chart of accounts and the budgetary process for

these accounts might resolve the issues. For purposes of control only, if the account structure

was such that the central department and the control accounts were budgeted in a separate

fund, the expenses recorded in that fund at the cost center where they occurred and the budget

managed at the fund level, all the necessary checks and balances would work as in any accounting

system.

The actual accounting and reporting could remain in the General Fund and be much simpler with

summary journal entries being made monthly or quarterly to reflect the actual expenses

recorded in the control fund.


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Finance – Position Management The management of positions was fundamentally sound, but difficult to execute. We found one

of the stricter adherence policies with regard to managing positions that we have seen in some

time. However, the tools to do this in the real‐time atmosphere are not present here, and present

a true obstacle to the goal of having a constant, real‐time view of district vacancies at any given

time.

Recommendations

Create a position dashboard for all cost center managers. The act of creating this real‐time portal

will highlight the need for the tools, timing and procedures that will benefit every other process

downstream. Once cost center managers can see their total FTE, their vacancies, their

incumbents, the funding, and all dates associated with this information, in real time, they can

make decisions that affect the job requisition to the first paycheck at the front of the process,

rather than at each stop within the process.

Develop three business processes using workflow that leverage the position dashboard:

1. Position Change request – The position change request is a request to change the

nature of a position (e.g. FTE) without changing the dollar impact to the cost center.

A cost center manager views the position makeup of their cost center and may decide

that there is a different FTE allocation that is allowed but better suited to conditions

at the time. This request goes from the cost center manager directly to budget. The

purpose of this request is to tactically change positions. The change would

immediately reflect on the position dashboard.

2. New Position Request – This is a request for additional FTE using new money. This

request involves workflow routing to those allowed to approve new dollar

expenditures. This is typically a Cabinet or Board level approval.

3. Personnel Action Request – This is a request by a cost center manager to change or

transfer an existing employee. By creating a fast and easy request process, we provide

the means to clear employees out of old positions quickly. This allows us to hold

managers accountable for the movement of employees, and allows us to enforce the

policy that a vacancy must exist prior to placing an employee. This process serves the

manager well also, giving them a direct and streamlined way to notify Human

Resources that employees are leaving or on the move.


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Human Resources General Observations

We were impressed at the fundamentally sound understanding of good Talent Management,

Human Resources, Benefits, and Payroll processing, policy and procedures at Shelby County

Schools. We are typically confronted with a “processing only” approach in K‐12 and were excited

to find that SCSD believes strongly in the recruitment, retention and employee development

“best practices” espoused by leading organizations.

Ultimately, we found departments with high ambitions for best practice, but without the

software systems, business intelligence or electronic workflow that are typically found in

organizations these aspirations. Consequently, new initiatives to improve do not realize their full

potential, and require an ever‐shrinking staff to take on more responsibility.

The lack of functionality inherent in APECS has resulted in three distinct coping strategies that

have contributed to the relative inefficiency and frustration that we found:

The first was the modification of APECS to meet the needs of the district. This began as almost a

survival tactic, as the transition from the mainframe‐based system to a much smaller APECS

system necessitated customizations to work.

The second strategy was the purchase of many “best‐of‐breed” software packages. Much of the

talent management and workflow routing capabilities desired by SCSD was beyond reasonable

customization in APECS. In these cases, SCSD chose to implement programs or hire vendors such

as NovaTime, ICIMS, ChoiceLinx and Zoho. While best‐of‐breed software is oftentimes the best

way to advance the ambitions of a district, the strong technology base was not present in APECS

to provide the core. In time, the lag effect that has resulted from the multitude of integration

programs has resulted in a great deal of rework in each process.

The third strategy used in all of the departments that we interviewed was simple manual, brute

force. Some business processes that ultimately produce a good result, do so via the manual

manipulation of spreadsheets, manual lookup of credential information, or human follow‐up

with the schools and departments that they serve.

New Human Resource Management (HCM) systems are rarely the silver bullet that they are made

out to be in school districts. A world‐class system will not fix inefficiency on its own. However,

our opinion after many months with the HR, Finance and IT staff is that your ambitions exceed


Page 24


your toolset, and your large employee and student population. A new Enterprise Resource

Planning (ERP) system must be the first step to progress further.

When writing our business process level recommendations for Position Management, Talent

Management, Human Resources, Benefits and Payroll, the recommendation was relatively

simple. Treat employee processes, as one large process. Create business intelligence around this

process. Communicate this process to the applicant/employee, the manager or the principal

constantly. Track the process itself, as well as the key performance indicators that measure that

success.

The human resources processes that focus on the hire, maintenance and termination of the

employee are also victims of the mix of software packages and integrations. Each package has its

own reporting suite. Each package has its own login. Each package requires unique training, has

different a different user interface, and relies upon IT for knowledge on how it integrates.

In general, we found that an overall improvement in the timing of the employee hire and

onboarding, the implementation of real‐time position management, and the incorporation of

automated certification and licensure checking would free up a lot of the manual work and

checking done today.

Recommendations

Evaluate all best of breed programs against the programs in the new ERP during the

prototyping stage of the HCM implementation. When the case can be made for both,

choosing the ERP systems will further standardize the district on one platform with

common reporting, employee and principal portals, self‐service and workflow.

Further dive into the timing of the employee hire from the acceptance of the application

to the completion of the benefits enrollment. All downstream processes will benefit

from the quick entry of employees into the HCM system.

Use pay components in compensation. Base pay on the salary schedule can be

enhanced with assigned components of compensation like stipends and supervision that

make tracking hours down the line easier for employees.

Develop KPI reporting in the new ERP. Leverage your new investment by developing a

good list of reports and KPIs that inform not only HR about how the effort to recruit and

retain is progressing, but provides managers and principals with more in‐depth

information.

Talk to the State Department of Education to work on streamlining the validation of

Certificates and Licensure.


Page 25


Split out Instructional and non‐instructional business processes if best‐of‐breed is still desired.

Payroll A successful pay check is the culmination of timely hiring, accurate compensation, employee

benefit elections, appropriate FTE, W4 exemptions, garnishment entry, time‐off and time entry

collection, stipend and workshop submissions by the schools, and overall communication

between the central office and the sites. The SCSD Payroll department has a system and

procedure to deal with all of these eventualities, and is not eager to adapt for a second time in 5

years.

Rework or missed pay is generally a result of information not entered in a timely fashion in some

part of the system. Untimely information results in under and overpayments. While normal for a

large K‐12, SCSD has its fair share of avoidable paycheck errors that can be attributed to upstream

processing lags.

Payroll is going to benefit the most from the streamlining and timeliness of the processes that

we implement upstream in position management, benefits and HR. When administered

correctly, the payroll is simply a calculator of inputs.

The new ERP system will allow Payroll a few advantages over what is in place today. Good payrolls

rely upon solid verification reporting, so that errors that escaped human eyes can be fixed prior

to the payroll. Stronger business intelligence tools will aid this cause. Business process

management, or workflow, will speed the processing and visibility of the task, resulting in

properly calculated checks.

Payroll is the area of most risk in an ERP implementation, if only because the other HCM areas

must be correct prior to the payroll being correct. This is an area where an adequate number of

experienced resources, especially in parallel testing, can help determine success.

Recommendations

Leverage the new ERPs ability to provide advanced verification reporting. With stronger tools

for reporting and ad hoc reporting, we can and should create as many verification reports as

possible to spot payroll issues prior to processing.

Use new ERP spreadsheet uploading and integration tools to develop uploading spreadsheet

templates for items like stipends.


Page 26


Develop and use overtime rules in Time and Attendance system to remove the overtime

calculations from human hands.

Implement blended FLSA calculations that accurately calculate overtime for employees with

multiple rates.


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Benefits The district uses a third‐party vendor, ChoiceLinx, to provide benefits and open enrollment to its

employees. The Benefits department also manages statutory leave such as FMLA, employee

retirement and pension accounts, and provides a point of contact for retirees and COBRA

recipients

The system in place seems to work adequately for the number of people staffed in the Benefits

department. Bringing these tasks in‐house would result in significant risk for the first few years,

as the district has used a third‐party administrator for a number of years.

The purchase of a new ERP is going to provide some advantages and some choices for Benefits.

As the new system will be much more capable of determining eligibility and providing self‐service

than APECS, leaving those tasks to ChoiceLinx will require a more sophisticated integration

strategy than the one in place today. Employees must choose their benefits upon hire, life event,

open enrollment and termination in ChoiceLinx, but have an accurate and timely deduction in

the new ERP. Improvement in the Benefits area revolves around having this deduction in place

and accurate prior to the payroll in which it should be deducted.

Recommendations

Keep ChoiceLinx, but utilize the ERP for Benefits workflow, eligibility and reconciliation.

Develop reconciliation reports in the new ERP to balance monthly premium payments

against payroll deductions and vendor payments.

Move FMLA tracking into the new ERP system. Manual tracking of FMLA is problematic

and difficult, given the various rules


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Talent Management HR has purchased and is implementing several best‐of‐breed software packages to further their

ambitions for the recruitment and retention of employees, primarily instructional staff. They

have purchased ICIMS for applicant tracking and onboarding, True North Logic for performance

evaluations and professional development. They own SmartFind Express for substitute

deployment.

The purchase of these packages presents a decision point when implementing a new ERP. Some

of this functionality, particularly those executed by ICIMS and True North Logic, will be available

in a new ERP system when selected. These current systems will undoubtedly provide deeper

functionality with regard to instructional staff than that provided by the big ERP vendors.

However, the ERP vendors will have better reporting, consistency of process, less integration,

and necessitate less end‐user training for school‐based users. Each will need to be evaluated on

a per case basis, with integration into the bigger package preferable to integration.

Recommendations

Decide on a long‐term software strategy for talent management that spans Professional

Development, Recruiting, Onboarding, Succession Planning, Evaluation/Performance

Management. This strategy should minimize outside software, but not necessarily

exclude it. A strategy for the future will allow us to use the implementation of the new

ERP to either implement these modules or interface outside software into a functioning

and cohesive strategy.

Develop competencies by job class if not already accomplished. This typically takes some

time, but is the foundation of most integrated talent management efforts.

Transform your Onboarding process to leverage the new tools available in the ERP or

ICIMs to deliver communication, scheduling and district compliance information

electronically, thereby increasing communication with new employees and reducing the

time necessary to make employees effective.


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Nutrition Time and Attendance

At the time of the interviews, a new time and attendance system for Nutrition Services was going

live that week. Initially, 150 employees were expected to use the system with an expectation

that in the near future all 1600‐1800 Nutrition Services employees would do so. The District

selected NOVAtime to capture work time data for its Nutrition Services employees with thought

given to potentially rolling out the solution on a much larger scale to schools and departments

pending success of the initial project. Crucial to the success of NOVAtime is the integrations

between NOVAtime and APECS.

The expectation is that NOVAtime will be able to collect the time without issue. However, for

time to be approved the relationship of employee to supervisor must be defined and must be

loaded in NOVAtime. This data should be available in APECS and made available to NOVAtime

via integration however the data in not available from APECS and is being manually keyed into

NOVAtime. Another deficiency is the lack of leave accruals in NOVAtime. Although the leave

balances exist in APECS, they are not transferred to NOVAtime.

Novatime and APECS Issues

Overtime: There is no capability within APECS to calculate overtime automatically. Those

responsible for paying the employees must check to see if overtime has been worked and if so,

to calculate the overtime amount manually.

Terminated Employees: There is no way to stop terminated employees from continuing to punch

in. Therefore, updates to the system are crucial to drop inactive employees and consequentially

disable their access.

Employee Records:

Employee must be flagged to be able to use NOVAtime otherwise a paper timesheet is

still required

It is easy to add new employees, but the District is terrible at discontinuing old

employment records

Substitute employee records are not deactivated when they are hired full time


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Use of Horizon

The District is unable to take complete advantage of the Horizon software which is used for menu

planning and inventory control as it has not been working correctly. There was a period of over

six months that Nutrition Services was unable to do receiving with the software. The system is

also used for order creation but the information created has to be pushed to APECS to generate

a purchase order and buy the goods. This process is not automated and requires significant

spreadsheet manipulation to determine order quantities. There is an existing interface that is

supposed to load vendors from APECS into Horizon along with a terms and conditions number

and an allowed total board authorization amount. This integration fails and the resultant error

report provides no detail at all.

Duplicate Student and Employee IDs

Nutrition Services is responsible for the meals of over 120,000 students, far more than the total

enrollment of Shelby County Schools as they must also feed the students from the Achievement

School District. While this seems like a problem only in the scope of services, it is also a student

accounting and tracking problem. Since all students fed by Nutrition Services are not in the

District’s student information system, an import of student IDs and demographics from the

Achievement School District student information system is required along with an import from

the District Student Information System. The resulting problem is duplicate student identifiers

for students that are otherwise distinctly different. To resolve the issue an Access database has

been created to translate student IDs and resolve the duplicates before the student information

is imported. The duplicate ID problem also extends to staff of ASD and SCSD as they are allowed

to dine in the school cafeterias.


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Procurement ESchoolMall / APECS

The District utilizes a hosted service, eSchoolMall, to conduct bids and quotes. eSchoolMall

provides functionality allowing the District to post a bid or quote, solicit responses, evaluate the

responses and determine a winning proposal. However, eSchoolMall does not have the

functionality required by Nutrition Services to evaluate and compare the proposals in specific

units of measure such as per serving or per carton. Therefore, eSchoolMall isn’t used to conduct

bids for Nutrition Services goods which are processed by hand and on paper. There is no

integration between eSchoolMall and APECS. Therefore, data must be manually input into both

systems. This is an issue for both the district and for the vendors that choose to submit bids

through eSchoolMall. The vendors must register at eSchoolMall and they must also register with

the District. There is no vendor portal in APECS so vendor registration is a paper‐based process

requiring District personnel to input the information.

Without integration, District staff have to continually update eSchoolMall with their list of

preferred vendors. Vendors must continually update the District and eSchoolMall with their list

of NIGP codes so that they get notified when appropriate bids or quotes are posted for response.

SchoolFundsOnline / APECS

The District utilizes a yet another supporting software system, SchoolFundsOnline (SFO), to

manage funds collected by schools for student fees, yearbooks, athletics, clubs and fundraisers.

The schools then use the funds to purchase goods and services for the school outside of the

District procurement process. As with eSchoolMall, there is no integration between SFO and

APECS. The school purchasing process requires the creation of a vendor record in SFO and the

subsequent accounting of funds. Therefore, there is vendor data in potentially three places (SFO,

APECS, and eSchoolMall) all manually created, without any process for ensuring commonality of

vendor number or any other data element across the three systems. Since both SFO and APECS

are accounting systems, 1099s must be produced at the end of the calendar year for each vendor.

The IRS requirement is for the District to produce a single 1099 for each vendor therefore the

data from SFO must be combined with the data from APECS. Without common vendor numbers,

the process of doing this is entirely manual, requiring multiple phone calls, matching on whatever

available data there is such as address or phone numbers and producing an Excel spreadsheet

from which to produce the 1099s.


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Manual and Paper‐based Processes

The overarching concern expressed on interviewing the process owner was the manual nature of

each process from creation of a requisition through the approval process to the issuance of a

Purchase Order. The entire process is manual and requires everyone to touch it before it can be

completed. The 1099 process as described above is problematic but it is worsened by the fact

that each vendor must be reviewed manually to determine if they meet the requirements to even

receive a 1099. There is no indicator in the system to flag vendors that must be reported on a

1099.

Lack of Common Controls

The current software system forces the continual verification of availability of funds during the

entire procurement cycle from requisition to payment. Issuing a requisition will encumber funds

but the system doesn’t restrict those funds and prohibit their expenditure even though they have

already been obligated. Therefore, a requisition may be converted to a Purchase Order, the

goods purchased and received, and at payment time not have sufficient funds available. This

makes the originating school or department look bad, creates a rush to find available funds, and

places additional work on Finance and Budget. All of which is unnecessary. System level controls

to monitor things such as total spend towards a threshold (bid threshold, board approval, etc.)

or to restrict purchase of designated items from unapproved vendors or allowing prior year

transactions without safeguard are non‐existent.

Vendor Management

There is an admitted lack of vendor management primarily because all of the processes are

currently paper‐based and there is little opportunity to efficiently determine whether a vendor

is performing adequately or not. There is a blanket approval process for all vendor requests; any

firm can be a vendor. Furthermore, as described above, the management of vendor data is

complicated by the usage of four independent systems without integration between any of them.

It places a huge burden on the District just to manage the demographic data elements alone.

Within Procurement, one employee is dedicated to maintaining vendor data in APECS while even

more time and effort is required by others to maintain eSchoolMall, Horizon/OneSource and

SchoolFundsOnline. Integrations need to be developed to send vendor data from APECS to the

ancillary systems (eSchoolMall, Horizon/OneSource, SchoolFundsOnline) to eliminate the

redundant data entry, ensure data quality, to simplify record keeping, and to streamline year‐

end 1099 processing.


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Furthermore, having four independent systems makes it impossible to gather any metrics on

vendor effectiveness. The District lacks the tools to evaluate vendor on time delivery, vendor

participation, total vendor spend, or any other desired performance indicator.

Recommendations

System Integration: The problems resulting from the lack of consistency between systems

dictates an immediate need to standardize numbering concepts through development of tightly

coupled integrations between APECS, SFO, Horizon/OneSource and SchoolFundsOnline. These

integrations would eliminate duplicate data entry, ease the process of preparing 1099s, and

eliminate a lot of the manual manipulation required today.

Quotes, Bids and Purchasing: While eSchoolMall provides functionality that is not available for

APECS for posting bids, soliciting responses, and evaluation submission, it doesn’t meet all of the

needs of the District. Furthermore, without integration to APECS, duplicate entry is required to

process a bid or quote. Additionally, since Nutrition Services needs to evaluate quotes or bids in

non‐traditional units of measure such as serving size or per carton, major consideration needs to

be given to finding or building a software solution to meet all District needs including efficiency

in processing. If eSchoolMall is the system of choice for the District, work needs to be put into

developing the functionality of Horizon to prepare the bids/quotes with as integration to

eSchoolMall for vendor access and processing. And, work needs to be put into developing

integrations between eSchoolMall and APECS to streamline the process, eliminate redundant

entry for District Staff, and make vendor processing more efficient. Purchasing policy regarding

substitutions on food items needs to be developed so that bids can more easily be evaluated in

a fair and equitable way.


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Warehouse The warehouse entity within the Shelby County School District is comprised of the MCS Legacy

warehouse, the Shelby warehouse and a maintenance parts warehouse. The MCS and Shelby

warehouses deal with textbooks, custodial items, education and fuel. These two entities are part

of the APECS system; the maintenance parts warehouse runs on SchoolDude. The warehouse

entity is a self‐sustaining cost center, covering all internal costs via “sales” to SCSD entities. The

warehouse entity would like to enhance its ability to meet the needs of all SCSD departments by

increasing its inventory of items and eliminating carry of products that aren’t consistently

ordered.

Recommendations

Communication with the General Ledger: The current system generates too many reconciliation

issues between the warehouse “ledger” and the asset accounts on the general ledger. A

significant contributor to this problem is the merger that took place between SCSD and MCS and

the awkward/flawed setup of items within the warehouse system via that merger. Another

reconciliation factor is the fuel sales receiving and invoice processing. Currently a PO for a fuel

purchase can be issued for a specific price, but the fuel delivered and received/invoiced at a

different price. Any selected ERP system needs to have an integrated warehouse/general ledger

structure with either real‐time or at most, nightly, updates between the warehouse/general

ledger asset balances. This system should have an automated reconciliation processes that can

be executed throughout the month so that variances, if any, can be corrected outside of just the

month‐end process. Fuel orders need to made either on blanket POs with no item pricing and

matched between the receipt and invoice or the fuel provider needs to invoice at the purchase

price and not the market price at time of delivery.

Inventory or 3rd Party: The district needs to decide if the warehouse should expand its offerings

or use an ERP system that integrates with a 3rd party business office retailer such as Staples. The

larger office supply stores offer ways to integrate into an ERP so a selection of store items

generates a PO within the ERP system and is issued electronically to the store. SCSD would have

the ability to limit what could be ordered from the store. This may be a more effective way to

supply departments with everyday items and custodial goods. That said, the warehouse would

still be necessary to handle textbooks or specific education products and other items which the

warehouse may be able to stock in large quantity and deliver quickly, such as paper.


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Inventory

An attempt has been made to integrate inventory data and transactions between Horizon and

APECS. The integration is failing regularly and Horizon cannot seem to get it fixed. Nightly a file

of 50,000‐60,000 transactions generated which has to be manipulated by the Director before it

can be loaded into APECS. A file that is too large will overwhelm APECS and fail on import.

Recommendations

NOVAtime: With prebuilt interfaces to nearly 400 different payroll systems NOVAtime has

proven its flexibility to interface with any system. NOVAtime should be rolled out district‐wide

to standardize the time collection process for all employees not just Nutrition Services. The use

of time collection devices has proven time and again to streamline the time accounting process,

to improve record keeping, and to manage costs through accurate time reporting. A 1% savings

in labor cost through error reduction alone would justify the upfront capital expense to

implement the system. Compliance with Fair Labor Standards law will save the District an untold

amount of money in managing overtime or by eliminating future claims for underpayment.

Horizon: Issues with Horizon need to be resolved and the full functionality of the software be

utilized by the District. It will take a commitment by IT staff to dig into the system, find the

technical problems and resolve them. The fully functional Horizon system has all of the features

the District needs to build district‐wide orders for goods based upon the components of a single

meal. That particular functionality is not only desired but necessary to prevent over ordering and

to manage inventory wisely. Beyond that, integrations must be developed to simply the process

of getting the data in APECS and getting Purchase Orders issued.

Duplicate IDs: We must first seek to understand the numbering concepts of both the District’s

student information system and the Achievement School District student information system.

Once they are both understood, then:

The districts could strike an agreement and make a plan to keep the IDs unique

perhaps by managing ID number ranges or creating an alphanumeric numbering

convention uniquely identifying the district

A simple middleware‐like system could be developed to map and translate

student ID’s taking input from both student information systems

SCSD could provide ASD with student information services thereby ensuring that

student IDs were unique within the system

Use a state defined student identifier to determine uniqueness


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Next Steps

This Business Process Management book is the first step in a strategy to move SCSD to becoming

more efficient and an effective organization. The recommendations that we have accumulated

in these 122 documents will feed into:

1. ERP Assessment – RFP Process: The documentation from current business processes,

interview notes with Shelby SME and Apriant Consultants and the To‐Be documentation

with business process recommendations was utilized as input to formulate approximately

1,200 functionality related questions for ERP Vendors to respond to in the RFP process.

This will enable the ERP Evaluation team to evaluate objectively and match our detailed

needs and capabilities against each of the ERP packages in the market and finalize the

software that meets our recommendations in the best fashion for the next decade.

2. ERP Implementation Project: When the implementation consultants arrive in Memphis

at the district’s office to being work, this document will be shared with them to expose

them to Shelby County Schools back office business processes to guide in coding,

configuring and creating workflows in the software accordingly.

The findings from the business process re‐engineering task will be presented to the

Superintendent’s Cabinet and the Governing Board as part of justification for implementing a

new ERP software.


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Summary

The Human Resources, Warehouse, Nutrition Services and Fiscal Services departments are the

backbone of the District, providing the necessary support to the entire school staff, and these

departments are only as efficient as their underlying business processes. Our work has uncovered

numerous inefficiencies within these processes. This Business Process Management document is

the first step on the path to correcting these issues.

To increase the operational effectiveness of these departments, and the District as a whole, we

have provided recommendations for the most critical business processes. These

recommendations can be implemented prior to and during the ERP implementation, allowing the

District to leverage the new technology to its fullest.

A school district environment is continually evolving and their business processes should as well.

A critical component of success in this business process management effort lies in continuous

improvement of the reengineered business processes. These recommendations should not be

set in stone once implemented. The District will be in business for a long time and continuously

reanalyzing and re‐engineering the processes will help keep the District as efficient as possible.

By supporting and adopting the business process recommendations put forth, and focusing effort

on continuous processes improvement, the District will be have the tools and best practices to

efficiently and effectively conduct the business of providing education and directly support the

efforts of school staff to produce career ready graduates.

ACC001 Journal Entry

1

ACC001 Journal Entry

Business Process Description The Journal Entry process is the process by which Central Accounting creates and posts to APEC any financial adjustments, accruals, account corrections, and other manual journal vouchers to accurately reflect balance sheet, revenue, and expenditure accounts in the general ledger. Journal entries can be initiated by central accounting, budgeting, financial analyst and school personnel. Budgeting and school personnel submit their journals to central accounting for review and posting; financial analyst can post their own journals. Journals can be entered directly into APEC through a journal entry screen or, as a majority do, journals can be created in excel, saved as .csv files, and then uploaded into APEC.

Business Process Steps Step # Step Description Executed By 1. Determine a need to create a journal entry. Create the journal within

an excel template that can be uploaded or as a manual entry via an email.

School personnel, financial analyst, budgeting, central accounting

2. If a school personnel or budget group needs a journal entry, they send an email to central accounting with the excel journal template or email message that a journal needs to be created within APEC.

School personnel, budgeting

3. Central accounting loads the journal template or creates a manual entry per the email, reviews and saves/approves the journal. An attachment is required to support the purpose of the journal entry.

Central accounting

4. If a finance analyst enters or uploads the journal, they can save it. An attachment is required to support the purpose of the journal entry.

Finance analyst

5. Budget Center Manager reviews and approves the journal as routed to him/her via APEC. Checking to ensure expenses within funds are appropriate.

Budget Center Manager

6. If issues exist, the journal can be returned to the initiator. Central accounting 7. If more than one fund impacted, can move the journal to another

BCM for their approval. Central accounting

8. If no issues, central accounting can approve the journal for posting. Central accounting Business Process Details As-Is Inputs: No external inputs identified.

As-Is Outputs: No external outputs identified.

As-Is Systems: None

As-Is Controls: None

As-Is Interfaces: None

As-Is Reports: None

As-Is Statutes: None

2

Business Process Map

1

ACC001 Journal Entry Executive Summary The journal entry process by which financial analysts, budget personnel and central account staff enter journals into APECS was discussed with accounting manager Carla Smith. The discussion and review of the journal entry SOP illustrated that the journal entry process is largely completed via excel templates (few people enter a journal through APECS screens but instead upload excel templates). Budgeting personnel have to email their journals to accounting for upload/approval. Some of the financial analyst journals have to go through a manual approval by Budget Control Manager. The APECS “account” was also discussed. Within APECS, the account is entire chart of accounts in a single string – fund/function/object/department/location/project. The budget and planning group are the gatekeepers of account setup and create all the necessary “accounts.” This means, if a new project is approved, budget will establish all the possible fund/function/object/department/location/project combinations that may be needed to transact financial activity with that new project value. Budget also establishes the correct budget amounts for each of those “accounts.”

Process Issues Not a lot of process issues were defined within the business summary or through the discussions; however, because APECS is the only system being used, perhaps there isn’t anything with which to derive a fair comparison. A few issues to note would be the following.

Journal reviews by Budget Control Managers are an unnecessary step if budget controls can be applied to the chart of accounts. Such controls should be automatic.

Budget and planning cannot enter their own journals. Journal entry should be easy enough that a majority are entered through the applications journal entry

screens. Uploads of journal templates should only be used for very large journals or as an interface for feeder systems.

Creation of entire chart of account strings is tedious. If a new project is needed, a single project code should be created. That project code can then be used with any of the other chart fields.

Business Process Recommendations

An integrated budget system would allow for budget development within the financial system and posting of those budgets once approved. The system should automatically check financial transactions (journal lines, requisitions, etc.) against the approved budget, which would eliminate the need for reviews by the BCM. The system should permit budget overspend if approved by the appropriate authority.

The GL should support a chart of accounts whereby each element is a separate entity and can be combined with any other element, thus eliminating the need to construct all possible valid combinations each time a new element is introduced.

All elements of the chart of accounts should support effective dating so that if a value is no longer used, it remains in the accounting system so historical reports remain accurate but it is no longer available for use in current processing.

The GL should support combination edit rules that allow for central accounting to create valid combinations of chart fields. This would be much simpler and easier to maintain than constructing the entire “account” string.

The accounting system should allow for the copying of past journals; this would reduce the time needed to create a journal.

The accounting system should allow for the creation of repetitive journals that the system self-generates on a schedule established by accounting. In this way, repetitive journals processed during month end automatically occur (entries that never change – rent, interest, etc).

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The GL should support allocation processes that create journals based on defined calculations from balances posted within the Ledger.


ACC002 Student Activity Accounting

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Business Process Description The Student Activity process describes the relationship between SCS Central Accounting and the accounting processes of schools for their individual student activity funding. Schools within the district are permitted to raise their own funds via special events, sporting events, bake sales, etc. and can use those funds to support student activities within the school. The State of Tennessee has set guidelines for how schools should account for and maintain their Student Activity funding. Currently, schools within SCS use a cloud based application called School Funds to handle their Student Activity funds; School Funds has no interface with APECS. The biggest challenge between SCS and Student Activity is the combination of vendor invoice activity to ensure vendors used by both entities are correctly identified, their payments summarized and correct 1099s issued.

Business Process Steps Step # Step Description Executed By

Business Process Details As-Is Inputs: No inputs.


As-Is Systems: School Funds



As-Is Reports: As described above


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Executive Summary The Student Activity topic was discussed with Leon Pattman, Chief of Internal Audit. As Mr. Pattman explained, schools are permitted to raise their own discretionary spending funds via special events, sporting events, bake sales, etc. and can use those funds to support student activities within the school. The District does not exercise spending authority over funds generated by the schools, but the State of Tennessee has set guidelines for how schools should account for and maintain their Student Activity funding within the State of Tennessee Internal School Uniform Accounting Manual. The District does maintain oversight access to the schools’ bank accounts at an administrative level but not on a daily operational level. SCS does not perform the monthly close but the school should close each month which requires a monthly bank reconciliation to be performed by the schools.

Process Issues There was on process issue identified. There is redundant issuance of 1099 forms to vendors that do work for the schools and the district.


• The cloud-enabled Student Activity software be utilized by all 174 schools should produce a consolidated report of all payments made to all vendors, summarized at the vendor level. This report/file should be in such a format that it can be combined with the same data from SCS so that a comprehensive single 1099 can be sent to each vendor that has transacted with the any of the schools in the district and the district itself.

ACC003 Warehouse GL Reconciliation

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Business Process Description The Warehouse GL Reconciliation process is how Central Accounting reconciles the assets balances within the Warehouse accounting/tracking system (Inventory Direct) to those within the district’s General Ledger (APECS). Because APECS does not have an integrated warehouse module, it is possible through typing errors, incorrect association of Warehouse Catalogue Items to GL accounts, posting changes to past periods and incorrect receipting of materials, to have unmatched account balances between the warehouse assets and those within the GL.

Business Process Steps Step # Step Description Executed By 1. Generate the Warehouse Reconciliation Report out of APECS. Central

Accounting 2. Generate the Warehouse Data Integrity report out of APECS. Central

Accounting 3. Generate the GL Asset Account Report out of APECS. Central

Accounting 4. Export Transaction Details for Inventory Function. Central

Accounting 5. Use exported data and excel pivot tables to compare warehouse and

GL ledger balances and then find disparities between AP Receipts and Warehouse Receipts.

Central Accounting

Business Process Details As-Is Inputs: GL, AP and Warehouse reports.


As-Is Systems: APECS, Inventory Direct, Excel





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Executive Summary The Warehouse GL Reconciliation process is how Central Accounting reconciles the asset balances within the Warehouse accounting and the district’s General Ledger (APECS). Through discussions with Ken White and Carla Smith and through the description in the SOP, it is apparent that balances between the Warehouse ledger and the GL Accounting ledger can be out of balance and need reconciled at month end (biweekly for Gas inventory).

Process Issues Process issues identified include the following.

1. If catalogue items are received at the Warehouse and the item is associated with the incorrect GL Asset account, then the balances between the ledgers will be incorrect.

2. If items are receipted at the warehouse but the invoice is not received/entered at time of reconciliation, balances will not match.

3. In the case of fuel purchases, fuel ordered at one price may be receipted at the ordered price but the invoice may be at a higher or lower price, depending on market conditions from time of order to point of delivery. This will mismatch balances between the ledgers which need to be reconciled.


• SCS needs to have a Warehouse system that is integrated with the GL system so that when materials are receipted the system generates an accrual entry which posts to the GL and represents the expense into the period in which the goods were received. This accrual should automatically reverse in the following period, matching to the amount invoiced. If the invoice does not arrive, the re-accrual happens automatically until the invoice is received.

• The items within the Warehouse need to have proper association with correct Asset Accounts on the GL so that incorrect balances between the two do not occur.

• A reconciliation job should generate a report of imbalance between Warehouse items and GL Accounts. The report should be produced out of the GL without any downloading or files or utilization of Excel, pivot tables, etc.

ACC004 Cash Receipting

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Business Process Description The Cash Receipting process is the process by which Central Accounting identifies and captures revenue streams in the form of cash, checks, ACH and memo transfers. Central Accounting codifies these items into APECS, reconciles the balances against those of the bank account and finally reports to the Trustee using spreadsheets and reports from the bank.

Business Process Steps Step # Step Description Executed By 1. Identify the receipt type. 2. If cash, make a cash receipt deposit using APECS cash

management functionality and assign the receipt the correct revenue account.

Cashier

3. If a check, use the APECS cash management functionality (Quick Deposit) to record the check information and assign each check logged with the correct revenue account.

Cashier

4. To record ACH payments into APECS, first open the Region’s Bank website and run a report on prior day ACH activities into the SCS bank account. Each ACH entry is researched and given the correct revenue account.

Sr. Cash Accountant

5. ACH payments are entered into APECS via the cash receipt screen using the correct account code.

Cashier

6. To record Memo Transfers, the Transfers are first identified via a Trustee report and then the entered into APECS via the cash receipt screen using a list of correct revenue accounts based on the Memo Transfer type.

Cashier

7. On a daily basis, report to Trustee all deposit activities for the prior day. Separate reports are created for each deposit type. Run the Region Bank’s transaction report to match against the deposit reports. Run the APECS Transaction list to confirm it matches to the separate reports and Bank’s transaction report.

Cashier

8. Email entire report package to the Trustee on a daily basis. Cashier 9. Generate the Daily Cash Report based on cash receipts entered into

APECS. Complete the deposit ticket; yellow copy is clipped to the Daily Cash Report for record keeping, the white copy is placed into the cash bag for pickup by armored carrier and delivered to the bank.

Cashier

10. Generate the Quick Deposits Transaction list to illustrate all checks entered into APECS for the current day. Using Regions Bank’s I-Capture facility, checks can be scanned and totaled electronically. Once the I-Capture totals match the Quick Deposit APECS totals, the I-Capture file can be uploaded to Regions.

Cashier

11. For NSF issues, use the same cash receipt screen, this time entering a credit amount for the bounced check against the same account to which the initial debit deposit was created.

Cashier

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Business Process Details As-Is Inputs: Cash payments, Checks, ACH and Memo Transfers.

As-Is Outputs: Report package to the Trustee documenting daily deposit activity into the Region’s Bank account.

As-Is Systems: APECS, Region’s Bank online software



As-Is Reports: Excel reports for each deposit type, Transaction Report from APECS, Transaction report from Region’s Bank


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Executive Summary The Cash Receipting process is documented in an SOP and was also discussed with Carla Smith. The cash receipting process is how SCS records four different “deposit types” into its cash accounts. These types are cash entries, received checks, received ACH payments and memo transfers. The County Trustee controls all cash for the District and maintains the fiduciary responsibility of deposit transactions. SCS does not maintain its own cash nor issue its own checks (except for emergency situations, in which case SCS has check stock on which they can produce a manual check). Instead the Trustee sweeps funds in and out of SCS cash accounts at Regent Bank to consume all deposits and to cover all payments. A third party issues the vast amount of all checks for SCS. In order to support this structure, SCS reports daily to the Trustee on all deposit types it processes. For cash and checks, these are current day deposits while ACH is prior day deposits. Because the Trustee sweeps all cash that enters the Regions cash accounts, the Trustee needs to know which funds should be debited the correct balances; it cannot determine this based on the bank deposits alone. For this reason, the Cash Report that SCS sends to the Trustee each day is used by the Trustee to re-class all deposits it has collected from a single memo account into the correct cash accounts within the proper funds. Memo transfers are actually deposits into SCS cash accounts via the Trustee (CIP reimbursements, Tax funds, etc.) which SCS doesn’t know occurred until the Trustee reports it to SCS. At that point, SCS makes cash memo transfer “deposits” into their own APECS GL cash accounts to bring their account into balance with the Trustee.

Process Issues There was on process issue identified. The actual entry process of deposit types into APECS is not difficult. In fact, the receipting of checks is very easy with a scanner that creates a file that is loaded into the Regions account. The creation of the Trustee Deposit Packet is burdensome. However, given the fiduciary control and responsibility of the Trustee and the fact that SCS doesn’t control its own cash balances (non-discretionary accounts) nor its own check generation, these processes will need to continue.


• The GL Treasury/Cash management system needs to be robust enough to produce Cash and Check deposit reports without having to extract data into excel reports and generate matches between the cash accounts and transaction reports.

• The system should be able to accept a download of all ACH payments processed by Regions and load that data into the Treasury/Cash management system without any manual intervention. These ACH activities should then appear on the same Deposits Report as the Cash and Checks.

• The system should be able to accept a download from the Trustee and automatically load the Memo Transfers. Some re-class of Memo Transfers to correct cash accounts may still be necessary dependent on how the Trustee tags the memo transfers.

ACC005 Customer Invoicing

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Business Process Description The Customer Invoicing process is the process by which Central Accounting generates invoices, namely to bill Achievement School Districts for services provide by SCS. The data entry and creation of the printed invoices all occur within APECS without any interfacing to exterior systems. AR Invoicing is a limited activity, producing about 30 invoices a month.

Business Process Steps Step # Step Description Executed By 1. User signs into APECS, enters the AR module and selects Customer Invoice

from the menu.

2. User goes to Task and clicks on the down arrow and selects AR-Finance Invoice from the drop down box.

3. User will then select the correct Due Date for the invoice.

4. Enter the correct description; need to be very specific for the service, activity, etc. for which the customer is being billed.

5. Enter the Payer Id (the customer). If the customer isn’t in the system, an email needs to be sent to the Cashier to create the customer id.

6. Select the correct revenue code, which automatically pre-fills the correct revenue account number. Enter the correct quantity and unit cost. Save and Post the invoice.

7. When ready to print, choose Reports from the menu bar and select Print Customer Invoice. Select the Print Invoices-Finance template so that all run-time data will pre-fill. Replace the invoice number range with the range that needs to be printed.

8. Go to the bottom of the page and click Submit. Then Go to Queue. Click the Search button until the Status is COMPLETE. Click on the Report Print Customer Invoice and click on one called PREFORMATTED.pdf

Business Process Details As-Is Inputs: Data entry

As-Is Outputs: Receivables within APECS and a Customer Invoice (approximately 30 a month)

As-Is Systems: APECS



As-Is Reports: None


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Executive Summary The Customer Invoicing process was reviewed with Carla Smith. The majority of customer invoicing deals with invoicing the State’s Achievement School District (ASD) for the services that the SCS has agreed to provide for the rates/term/pricing in the Memo of Understanding between the SCS and ASD. A great deal of calculating and data gathering is required to pool all the necessary information to generate a correct bill to the ASD for all the services performed by SCS. The customer invoice for ASD is created at month end and sent to the ASD. The ASD then allocates out the expense for each of the ASD schools serviced by SCS.

Process Issues Issues identified within the SOP and summary document included the following:

1. The process is too manual. Information is manually received and compiled from various departments.

2. The system should be able to handle monthly processing on a regular or routine basis. 3. There are many variables that are calculated into the charges for the ASD. 4. Manual journal(s) are need to record all the cost within APECS.


• It is likely the current Access database that contains all the agreed to charges from the MOU will need to be retained because a typical billing system will not derive an appropriate bill based on many different data inputs. The collection of data from many different sources is also a likely continuance based on the number of different services offered by SCS.

• The system should be able to handle repetitive billing (like duplicate journals) so that entire bills don’t need to be created each month, just the amounts updated. For example, it may work that bills can be created for different services rendered. In this scenario, bills can be copied from one month to another month and only their totals updated.

• For invoices outside of ASD, the billing system should support billing of different customers based on services provided. The system should allow the AR accounting/specialist the ability to enter in new customers within the invoice and have those customers saved for future billing.

• The AR system should allow for the manual printing of invoices or the electronic distribution of invoices to valid email addresses.

ACC006 Asset Management/CIP

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Business Process Description The Fixed Assets and CIP process is actually multiple processes to procure budget, track spending, request reimbursement for vendor payments and depreciate in-service assets. The current process is almost entirely manual and many of the processes are handled outside of APECS using Excel. The As-Is process as documented here is a mid-level view of the processes accounting and asset management at SCS perform to track CIP. Budgets for projects come from two resources. The first is the County. SCS creates a list of capital projects and submits that list to the County for review. The County Commission reviews the list and determines which projects to fund. The second source of funding is SCS’s discretionary funds, which are dollars generated by SCS itself through building sales, land sales and the leasing of buildings.

Business Process Steps Step # Step Description Executed By Budget Transfers 1. There are occurrences when not all of the money allocated to a

specific project are completely expended. In this case, a budget transfer request can be created. County project funds can only be used on Country projects, so it use remaining funds, they need to be transferred to a different project supported by County Funds. The budget transfer is initiated by Operations, then it goes to the Accounting Manager, the Budget Manager, then the SCS CFO, School District Board and finally to the County for approval.

2. Budget transfers are completed with manual journals within APECS to remove budget from one fund/function/object/department/project to another.

Budget Resolution 1. A budget resolution is necessary whenever additional funds are

requested for a County funded project.

2. A budget resolution must be approved by the SCS CFO and Superintendent before being taken before the County Board.

3. Once a budget resolution is approved, Budget and Fiscal planning will update APECS with the additional funding lines.

Reimbursement 1. As vendors/contractors work on the capital improvement projects,

they will submit invoices for payment.

2. Depending on the size of the project, there may be a need to not only submit an invoice, but also submit the appropriate AIA documentation which correctly stipulates the amount of retainage to be withheld from the payment.

3. Invoices and relevant supporting materials are gathered by Operations and submitted to AP for payment. Once reviewed and approved, AP will issue a check.

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4. At month end, SCS will submit all CIP invoices and supporting documents to the County Trustee. Once reviewed and approved, the Trustee will generate a Memo Transfers to cover payments issued by SCS. This a book-only entry which reimburses SCS for the payments to vendors made during the month.

Business Process Details As-Is Inputs: Data entry

As-Is Outputs: Receivables within APECS and a Customer Invoice (approximately 30 a month)




As-Is Reports: None


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Executive Summary The Asset Management/CIP processes were covered with Tutonial Williams. As illustrated in the As-Is process, Asset Management specific to CIP is an arduous process with Budget Resolutions to request County funding for new projects or the increase of dollars for existing projects, Budget Transfers from one County funded project to another and the reimbursement for funds issued to contractors for completed work.

Process Issues Issues identified within the SOP and discussion with Toni included the following:

1. Budgeting within Excel and later entering approved budgets into APECS is time confusing and prone to human error.

2. Budgets should have multi-year spans and not be confined by fiscal years. 3. Setting up entire account strings to track project expenses is time consuming.


• The financial system needs an integrated Budget Module (not excel) where budgets can be entered and manipulated without any impact to actuals or to other budgets. Once budgets are finalized, they can be “locked” and will then serve as the Planned Budget for the project.

• The budget module must allow for full project budgets. The spend/forecast (or booked to budget) variance should be available within the system (without downloads and excel manipulation) for monthly, quarterly, fiscal year and inception-to-date time spans.

• The budget system should handle budget additions and transfers with simple budget journal entries.

• As with journals, the system should allow for the creation of project codes which have effective dating attributes. In this way, new projects are easy to setup and if a project is budgeted but then cancelled, the code can be made inactive.

• In regards to reimbursement for payments made to contractors, SCS should be able to use a billing system to generate invoices for reimbursement. The bills should be able to hold scanned documents (such as AIA docs and vendor invoices) and the bills can be electronically submitted to the Trustee. This would eliminate the creation of month-end packets send to the Trustee. Once approved, the normal memo transfer would occur.

ACC007 TDE Reporting

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Business Process Description TDE information reporting are the required reports SCS must create for the Tennessee Department of Education on an annual basis. TDE reporting requires slightly different information than typical SCS reporting. SCS operates on a cash basis, while TDE requires more of a Modified Accrual reporting process which by and large consists of having to accrue open PO amounts at year end. SCS uses a chart of account string that does not map directly to the TDE account setup. Data must be extracted from APECS and loaded into Excel where it can be massaged to match the reporting structure and “roll-up” required by TDE.









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Executive Summary The TDE reporting process and purpose was discussed with Carla Smith. The TDE reporting requirement is the annual reporting that must be done for the Tennessee Department of Education. It is essentially the production of balanced-fund reporting. Unfortunately, the chart of accounts and fund values used by the TDE do not match directly to those of the District.

Process Issues

1. The process takes a very long time to complete. 2. A lot of manual manipulation is required to extract data needed for the reports and then compile

and sort the data. Business Process Recommendations

• The financial system should support the use of tree structures for the chart of accounts. The use of tree structures will enable SCS to build a report, for example, that balances on fund and natural account code. One tree will align and roll up information in a way SCS wants to see it using values SCS recognizes. A second tree can be built using fund or account values that mimic the desires of TDE, even using values TDE recognizes. This would allow SCS to rollup certain accounts to specific TDE values on the tree.

• There should be no reason to extract data from the Finance system to generate excel reports for TDE. The financial system should support internal report development that can support TDE reporting.

• A robust financial system will not only support independent chart field values and tree structures, but will also support different financial ledgers from which reports can be constructed. In this way, SCS could control what data was posted to a TDE reporting ledger and what only posted to an SCS actuals ledger.

ACC008 Invoice District Customer - ASD

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Business Process Description The Invoice of District Customers – ASD is a specific process for the invoicing of Achievement School District entities. Tennessee’s Achievement School District (ASD) was established to turn around the state’s lowest performing schools. Developed as part of the state’s First to the Top legislation, the approach allows the state Commissioner of Education to remove persistently low-performing schools from their home districts and manage them directly or authorize charter schools to serve ASD students. The state seeks to improve schools in the ASD by partnering with non-profit organizations around recruitment of highly effective teachers and leaders, improvement of human capital systems, and development of strong charter schools as well as direct management of some schools. Shelby County Schools (SCS) has entered into a MOU with the State’s Achievement School District (ASD) to provide the following services to the ASD:

• Facilities • Information Technology • Security Operations • Transportation • Special Education Contracted Services • Risk Management • Ancillary Services (items that fall outside of the MOU)

Invoice amount are based preset and calculated fees for services provided as determined by spreadsheets maintained and updated by SCS (see the SOP for details). Actual invoicing is conducted via APECS in the same manner as other invoices.









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Executive Summary The Customer Invoicing process was reviewed with Carla Smith. The majority of customer invoicing deals with invoicing the State’s Achievement School District (ASD) for the services that the SCS has agreed to provide for the rates/term/pricing in the Memo of Understanding between the SCS and ASD. A great deal of calculating and data gathering is required to pool all the necessary information to generate a correct bill to the ASD for all the services performed by SCS. The customer invoice for ASD is created at month end and sent to the ASD. The ASD then allocates out the expense for each of the ASD schools serviced by SCS.

Process Issues Issues identified within the SOP and summary document included the following:

1. The process is too manual. Information is manually received and compiled from various departments.

2. The system should be able to handle monthly processing on a regular or routine basis. 3. There are many variables that are calculated into the charges for the ASD. 4. Manual journal(s) are need to record all the cost within APECS.


• It is likely the current Access database that contains all the agreed to charges from the MOU will need to be retained because a typical billing system will not derive an appropriate bill based on many different data inputs. The collection of data from many different sources is also a likely continuance based on the number of different services offered by SCS.

• The system should be able to handle repetitive billing (like duplicate journals) so that entire bills don’t need to be created each month, just the amounts updated. For example, it may work that bills can be created for different services rendered. In this scenario, bills can be copied from one month to another month and only their totals updated.

• For invoices outside of ASD, the billing system should support billing of different customers based on services provided. The system should allow the AR accounting/specialist the ability to enter in new customers within the invoice and have those customers saved for future billing.

• The AR system should allow for the manual printing of invoices or the electronic distribution of invoices to valid email addresses.

ACC010 AP Reconciliation

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Business Process Description The AP Reconciliation process is the process by which SCS reconciles its payments via check, ACH or v-cards between the APECS GL and the amounts processed by Regions bank. Normal check payments and ACH payments are downloaded from Regions bank. These two individual excel sheets are then loaded individually into APECS and used to reconcile APECS activity/balances against those at Regions. Payments can also be issued to Vendors via a v-card. This payment type places the payment into a debit account which the Vendor can withdraw using their v-card. The funds are available for withdrawal for up to 30 days. Should the vendor not withdraw their funds, SCS can cancel the original payment and re-issue a payment into the v-card account. If the v-card expires, any payments still pending on the original v-card are cancelled and they are re-issued onto a new v-card. Should a vendor not withdraw their funds from a v-card, SCS has the option of cancelling the payment and not re-issuing a payment unless contacted by the vendor for said payment. Files for vCard processing are pulled from Sungard. After a variety of sorts and filters, the reports are formatted within excel and can be loaded into APECS for the same recon process as that done for checks and ACH.

Business Process Steps Step # Step Description Executed By 1. Log into Regions bank and download the most recent month’s bank

account statement for the AP processing account.

2. While in the Regions website, also find and download the v-card activity. Go to the Card Management System where a re-direct will occur to the Sungard system where the v-card transactions report can be downloaded. Sungard is the system that processes all of the SCS checks.

3. Copy the vCard template from the prior month and rename for the current period.

4. Open the SunGard Activity file (excel), filter on vCard and obtain the total vCard payments for the month.

5. Open the SunGard Settlement report (excel) and sum the settlement amounts.

6. Go through several manual sorts, filter and copy processes with the vCard file until the final balances are derived. Those should be provided to the AP Manager to work any vCard issues. The excel file should now be ready for loading into APECS.

7. To get all checks cleared in the month to be closed, log into Regions and run the Transactions Report for all transaction types within the month being closed.

8. Format and filter the transaction report excel file accordingly to match the import format needed by APECS.

9. Run the APECS reconciliation job using the excel template as input and work through any recon check issues.

10. Pull the ACH activity from the same SunGard file used to find the v-card payments by sorting on ACH transactions.

11. Compare the total of the SunGard ACH activity to the ACHs that cleared per the bank activity. The totals should match.

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12. Repeat the file load and APECS recon job with the ACH file to recon all ACH payments.

13. Repeat the file load and APECS recon job with the vCard file to recon all vCard payments.

14. Run AP Recon reports to show checks, ach and vcards cleared plus list of outstanding checks.

Business Process Details As-Is Inputs: Manual files from Regions and Sungard.


As-Is Systems: APECS, Regions, Sungard



As-Is Reports: Reconciliation reports for checks, ach, vcards and outstanding checks


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Executive Summary The AP reconciliation process is the process by which SCS matches what it has transacted as payments on its books to those of the Regions AP cash/distribution account. SCS can make payments via checks, ACH or additions to vendor’s v-cards (similar to a debit card).

Process Issues

1. Time intensive. Reports/files need to be downloaded from the Regions bank, manually converted into excel and manually configured to load into the APECS system.

2. V-cards contribute a lot administrative work to the entire reconciliation process. SCS has to accommodate vendors not pulling their funds off thier v-cards prior to expiration, only partially drawing down their cards and losing their cards. SCS spends time calling vendors to remind them they still have balances on their cards or never pulled off the balance before the v-card expired. SCS then has to reissue the funds back to the cards.


• Eliminate v-cards. If a vendor is to do work with the District, they should have a bank account in order to receive ACH payments if they do not want to handle checks. Perhaps Regions can support the effort with free checking accounts for vendors that do work for the District. At the very least, SCS should evaluate the time spent on v-card processing with the total number of vendors that use v-cards to determine if the v-card is a true value-add or unnecessary work.

• Downloading, converting and formatting data files from Regions to load into the Finance system should be eliminated. This can be accomplished in several ways

o Regions should develop and deliver a data file in the format SCS requires o Use a middleware product that automatically finds the file when Regions places it on an

FTP site and then downloads and manipulates the data (ETL) to load into the Finance system for reconciliation

o Use real-time interfacing methods such as XML to systematically convert the Regions file to the needs of SCS

• The entire AP reconciliation process would be much simpler if SCS controlled its own check creation process.

ACC010B Payroll Reconciliation

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Business Process Description The Payroll Reconciliation process is the process by which SCS reconciles its payroll batches within a month to the bank distributions from the payroll account. The process is very similar to the AP reconciliation but the Payroll Recon focuses on a different bank account. Also the payroll ACH’s are not tracked by the bank as individual ACH (check numbers) unlike AP.

Business Process Steps Step # Step Description Executed By 1. Log into Regions bank and download the most recent month’s bank

account statement (the month being closed) for the Payroll account.

2. Payroll will generate the Funding Request by Payroll report and the Manual Checks & Voids report.

3. APECS will produce Direct Deposit/Check Register, Outstanding Checks report, and the Checks Cleared report.

4. The data in these reports can be formatted into the same template APECS load file used for AP Checks and be loaded into APECS for matching.

5. Finally, the Gross Net Pay Void report and the Benefit Analysis reports need to be created to verify the payroll funding request.

6. The combined Gross Net Pay and Benefit Analysis report balances should equate to the Funding Request total amounts.

Business Process Details As-Is Inputs: Manual files from Regions.


As-Is Systems: APECS, Regions



As-Is Reports: Reconciliation reports for checks and outstanding checks


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Executive Summary The Payroll reconciliation process is the process by which SCS matches what it has transacted as payments on its books to those of the Regions Payroll cash/distribution account. SCS processes payroll with both checks and ACH deposits. This process and its part was reviewed by Carla Smith.

Process Issues

1. Very similar to the AP Recon process, the Payroll Recon process is very time intensive. Reports/files need to be downloaded from the Regions bank, manually converted into excel and manually configured to load into the APECS system.

2. Large number of off-cycle payroll disbursements make recon a challenge.






• Reduce the number of manual and off-cycle payroll checks and the number of voided checks within Payroll Processing.

ACC010C Depository Reconciliation

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Business Process Description The reconciliation process of bank deposits is the process by which accounting ensure the deposits recorded within APECS matches those as reported by Regions bank for a specific period. APECS does not support the upload of a file from Regions for automatic matching of deposit transactions, so the process has to be done manually via downloaded and converted reports into Excel and manual/ vlookup matching of transactions.

Business Process Steps Step # Step Description Executed By 1. Log into Regions bank and download the bank’s deposit report for

the period being closed (a .pdf file). Save and convert the file into an Excel report.

Senior Accountant

2. Perform a manual comparison between the .pdf file and Excel file to ensure all transactions entries and amounts are correct and nothing was corrupted during the file conversion.

Senior Accountant

3. Update each deposit transaction on the bank file with the correct “task” or deposit type (cash, check, ACH) as used within APECS.

Senior Accountant

4. Generate the “Transaction List” report from APECS that shows all the debits into the cash account 11140. This report essentially shows all activity within the account, specific to deposit “task” types.

Senior Accountant

5. Generate the “Transaction Report” from APECS which lists all deposit type transactions for the selected period.

Senior Accountant

6. Compare net amounts between the two APECS reports to ensure deposit transaction activity is the same as deposits made into account 11140.

Senior Accountant

7. Combine data from Regions deposit report and the APECS transaction report (deposit types only) into an Excel pivot table and ensure the transactions/balances within APECS match those as reported by Regions bank for the depository account.

Senior Accountant

8. Work through all matching disparities. These may include: • Bank transactions not in APECS, such as bank fees or bank

charges • Deposits made in the APECS cash account but not yet

received by the bank (in transit)

Senior Accountant

Business Process Details As-Is Inputs: Reports from Regions and APECS

As-Is Outputs: Large reconciliation Excel workbook

As-Is Systems: APECS, Regions



As-Is Reports: None


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Executive Summary The Depository reconciliation process was discussed with Arnesha Bobo, the senior accountant in charge of the process. SCS uses the depository recon process to ensure all deposits made via the daily Trustee Report are accurate in both APECS and in the Trustees account. The process recons the different deposit types of cash, checks, ACH and memo transfers.

Process Issues

1. APECS does not have a systematic process for reconciling deposits. SCS cannot download summary or detail reports in their format from the bank and recon them against depository information within APECS. All reconciliation matching is done with Excel.

2. Extraction from Regions is time consuming and manual. Reports need to be downloaded, converted into Excel, manually checked to ensure no data was lost in the process and formatted into spreadsheets. SCS must manually update all Region deposit transactions with the correct SCS deposit “type” before matching can occur.

3. Extracting data from APECS for all deposits and all transactions is also a manual process. Business Process Recommendations





• The financial system should have an internal matching process for all deposits. Essentially, a single reconciliation process should take all the AP, Payroll and Deposit information from Regions and reconcile it against activities in the financial system. Manual excel processes should not be used.

ACC010D Trustee Reconciliation

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Business Process Description The Trustee reconciliation process is one which SCS accounting performs on a monthly basis to ensure cash balances held by the Trustee (in specific funds) are equivalent to the same fund balances held within APECS. SCS has no direct control of any cash balances other than discretionary funds (which are monies raised by SCS through the sale or leasing of properties). All other revenue sources – County funding, Grants, Nutrition, etc. are deposited into Regions bank and immediately swept into the county Trustee’s accounts. The Trustee sweeps all deposits into a miscellaneous account on their own accounting system. At each day’s end, the SCS Cashier creates a “Trustee Report” which is submitted to the Trustee. This report details the deposit transactions for the day and identifies the fund to which each deposit should be applied. The Trustee can then re-class all the day’s deposits sitting in their miscellaneous account (on the Trustee’s books) into the correct Fund. The month-end Trustee Reconciliation process ensures all fund balances are correct and all transactions accounted. The process is highly manual and typically takes 4 days to complete.

Business Process Steps Step # Step Description Executed By 1. At the close of each month, the Trustee sends to SCS two excel

reports which always have matching balances: the Report of Receipts (showing all receipts into the bank) and a GL Transactions report, showing all transactions the trustee has enacted (cash in and cash out). The Transaction report also includes all warrant numbers the Trustee has paid.

Shelby County Trustee’s Office

2. SCS accounting runs their own GL transactions report for all cash in and cash out transactions (unlike the Depository reconciliation which only runs on deposit transactions) and GL account balances report.

SCS Senior Accountant

3. All four reports are placed into an Excel workbook. SCS combines the Trustee’s GL with the SCS GL and manually matches the transactions either by fund or reconciled with a fund difference meaning the transaction are matched in different funds. All of the SCS fund numbers are replaced with appropriate fund numbers that match those used by the Trustee.


4. Through multiple pivot tables, all transactions are compared and balanced at the fund level for cash deposits and cash payments. If there is a fund difference, the transactions will be re-classed to their respective fund. Cash receipts must be re-classed to their respective funds to ensure the accuracy of financial reporting.


5. A reporting summary is created to explain the variances between the Trustee’s GL and the SCS GL by fund. SCS will create a warrant re-class file and send that back to the Trustee. This file instructs the Trustee as to which warrants were paid from which funds (the Trustee makes daily payments from a miscellaneous account). The end goal is to ensure that both GLs contain the same transactions and the balances are in line at the end of each accounting period.


6. Some deposit re-class may be necessary for deposits received for which SCS did not know which Fund it should be applied.


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Business Process Details As-Is Inputs: Manual files from Regions and Sungard







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Executive Summary The Trustee reconciliation process was described by Arnesha Bobo, the senior account who performs the process. Because the Trustee is the fiduciary controller of SCS cash, the Trustee accounts for all payments and deposits for all funds used by SCS. At month end, SCS must reconcile with the Trustee to ensure the fund balances notated on the Trustee’s GL match the balances of the same funds on the SCS GL. The Trustee recon process is both cash-in and cash-out. It essentially ties together the depository, AP and payroll reconciliation processes and the re-classes of warrants, deposits, and additions of memo transfers that those reconciliations may have created.

Process Issues

1. Very manual with great use of excel. 2. Prone to error because of so much human intervention. 3. Is not supported systematically by APECS. 4. Can take as long as 4 days to complete.


• It is likely this process will need to continue in its current fashion even with the selection of a new financial system. The role of the Trustee in handling SCS cash and deposits is unique. Reconciliation with Region bank does not suffice the balance match that must occur between the SCS GL and the Trustee’s GL for each fund. Perhaps there are some fund accounting systems that will handle this process through a treasury module. In the least, the process could be improved, simplified and made shorter in duration if specific data needed for matching could be produced from the Financial system via canned reports/extracts instead of data dumps and excel formatting.

ACC011 Expense Reimbursement

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Business Process Description The Expense Reimbursement process applies to employee reimbursements for local mileage and for travel. Local mileage reimbursement covers necessary travel within the school district from one site to another site. Travel reimbursement is for training and conferences.

Business Process Steps Step # Step Description Executed By 1. Mileage reimbursement begins with employees accessing the

mileage reimbursement application via the employee area of the SCS website.

2. Once in the application, the employee completes the necessary fields for a new claim. Necessary info includes the data, from and to location, round trip or not, and if the system doesn’t automatically fill in the miles, the mileage of the claimed travel. Only one claim with all mileage should be submitted monthly.

3. The claim will need to be approved by the proper supervisor. The supervisor should review the claim for correct mileage and the correct account. Supervisor can return the claim if issues, substitute another approver if appropriate or approve the charges.

4. Travel reimbursement is generated by completing a manual form explaining the purpose and cost of the travel.

5. Upon completion of travel, the form is updated to document exactly what was paid for and if the employee owes funds back to SCS or if SCS needs to reimbursement the employee for approved costs.

6. Just as with mileage reimbursement, there are several layers of approval of the document.

7. The employee is reimbursed via an accounts payable check or ACH. Reimbursements are not provided via Payroll.

Business Process Details As-Is Inputs: Manual files from Regions and Sungard.







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Executive Summary Expense reimbursement was explained via an SOP and through discussion with Carla Smith. Mileage reimbursement occurs to pay employees for travel costs sustained by driving from one SCS to another SCS site for work-related activities. Travel reimbursements are paid for travel costs sustained by employees for attending seminars, conferences, etc. that are outside normal site to site travel within the District.

Process Issues

1. Both reimbursement processes are completely outside the financial system. Mileage reimbursement is handled by a system on the SCS employee website which essentially produces a bill for SCS to pay. Travel reimbursement is a paper form.

2. The payments to employees are generated out of the AP system.


• Both of these reimbursements should be handled within the payroll system and not be paid for by AP.

ACC012 Grant Receivable Tracking

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Business Process Description The process of Grant Receivable Tracking and Revenue Recognition is the process by which grant money awarded to SCS is collected and processed. Currently, SCS works on a cash basis and books to cash and revenue whenever a check or ACH payment is made to fund a grant. The award of a grant does not trigger a financial transaction within the SCS General Ledger. If the work funded by a Grant is performed prior to a Grant payment/funding arriving, the expense of that work is charged to the General Fund. The transaction will debit the “due to/due from” account (a receivable) and credit a revenue account while also debiting an expense account within the Grant Fund and crediting its due to/due from account (a payable). When the Grant funding arrives, it is booked to revenue and cash. A manual entry is then made which debits the Grant due to/due from account and credits cash while the General Fund will debit its cash and credit its due to/due from account.

Business Process Steps Step # Step Description Executed By 1. Grant is awarded to some person(s) or organization within SCS. 2. A request is made to budgeting to have the appropriate accounts

created that will be used with the new Grant value. Budgeting

3. When funding arrives in the form of a check or ACH payment, SCS is manually updated with a journal that debits cash and credits revenue.

Accounting Staff

Business Process Details As-Is Inputs: Grant award, check/ACH receipt





As-Is Reports: None


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Executive Summary The Grant Receivable Tracking and Revenue Recognition process was summarized in writing by Angela Carr. The process focuses on how SCS recognizes funding from Grants. Currently, the only recognition that takes place is when a check or ACH payment arrives, at which time cash and revenue are updated within the Grant.

Process Issues None noted.


• Currently, because SCS uses modified accrual accounting, “revenue” is only recorded when it is measurable and available, so funds for Grants aren’t recorded until actually received. No receivables are created. This fits Grants processing standard practices. Many Grants are never funded or are only partially funded, so creating a receivable would involve too much re-class work later and misstate SCS receivables.

• As has been recommended in other To-Be flows, a multi-component chart of accounts would allow for easy creation of new Project/Grant codes that could be used with any other chart of account values instead of have to create all possible “accounts” that a Grant/Project may use.

• With an integrated budget system, Grant budgets can be created and expenditures controlled based on the fund, grant number, account, etc.

ACC013 Month End Closing

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Business Process Description The process of Month End Closing is one used by nearly every financial organization to check for errors, balance accounts, reconcile to external agencies such as banks, clearing houses, etc., re-class incorrectly booked entries, generate necessary accruals, update Forecast for the coming months and of course produce Financial reports such as Income Statements (Statement of Activities), Balance Sheet (Statement of Financial Position) and Cash Flow Statements (Statement of Cash Flows). The month-end activities include the following, many of which are defined in previous As-Is flows:

• AP reconciliation • Payroll reconciliation • Depository reconciliation • Trustee reconciliation • Inventory reconciliation • ASD invoicing • Bank/GL/Trustee reconciliation • Forecasting • Standardized error checking/reporting done every month


Business Process Details As-Is Inputs: Monthly Financial activities

As-Is Outputs: Multiple reports




As-Is Reports: Multiple (SEE SOP)


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Executive Summary Month end processing is documented in a business summary and SOP. The SCS month end activities are like most financial “closing” processes. The overarching goal is to reconcile all activities with external agencies (bank, Trustee), find and fix errors, re-class misplaced expenses or revenues, create a balanced set of books by Fund and produce financial statements that meet required GASB specifications.

Process Issues

1. The overall process is very manual. Most of the major reconciliation processes are done with data extracts, excel formatting and pivot tables and manual journal entries.

2. Within APECS, a month cannot be closed. This means all past periods are open for the posting of financial entries. Any such posting can void all the work that goes into producing period-end reports.


• Any new financial system MUST support month-end closing processes that close all past periods to any new transactions.

• As stated in the reconciliation to-be documents, a large reduction needs to occur in the amount of manual, spreadsheet-based activities that need to occur at month end. Such activities are not only prone to mistakes (using an incorrect version of a spreadsheet, a formula not working, losing data because a file doesn’t save, inverting data, etc.) but producing reports outside of the financial system can result in reports that do not tie back to the system of record.

ACC014 Year End Closing

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Business Process Description The process of Year End Closing is one used by nearly every financial organization to check for errors, balance accounts, reconcile to external agencies such as banks, clearing houses, etc., re-class incorrectly booked entries, generate necessary accruals, produce documents needed by internal/external auditors, prepare all balances for the new fiscal year, and produce end of year Financial reports such as Income Statements (Statement of Activities), Balance Sheet (Statement of Financial Position) and Cash Flow Statements (Statement of Cash Flows). The year-end activities include the following, many of which are part of the Month End closing and defined in previous As-Is flows:

• AP reconciliation • Payroll reconciliation • Depository reconciliation • Trustee reconciliation • Inventory reconciliation • ASD invoicing • Bank/GL/Trustee reconciliation • Standardized error checking/reporting done every month end • Year-end Revenue accruals (Grant expense not yet reimbursed, General Fund expectations) • Accruals for open Invoices (with PO and without PO) • CAFR reports • Printing of Financial Statements

Business Process Steps Step # Step Description Executed By 1. Standard Month End reconciliation using excel and access. 2. Year-end specific accruals. 3. Audit data/report generation. 4. Year-end report generation and printing.

Business Process Details As-Is Inputs: Multiple-APECS, External sources for Recon

As-Is Outputs: Multiple reports




As-Is Reports: Multiple (SEE SOP)


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Executive Summary Year-end processing is documented in a business summary and SOP. The SCSD year-end activities are like most financial organization’s year-end processes. The overarching goal is to reconcile all activities with external agencies (bank, Trustee), find and fix errors, re-class misplaced expenses or revenues, generate appropriate year-end accruals for expenses and revenues that should be booked into the year being closed, create a balanced set of books that meet CAFR requirements and produce all necessary information for auditors.

Process Issues

1. The overall process is very manual. Most of the major reconciliation processes are done with data extracts, excel formatting, pivot tables, Access databases and manual journal entries.


• Any new financial system MUST support year-end closing processes that close all past periods to any new transactions.

• A large reduction needs to occur in the amount of manual, spreadsheet-based activities that need to occur at year end. Such activities are not only prone to mistakes (using an incorrect version of a spreadsheet, a formula not working, losing data because a file doesn’t save, inverting data, etc.) but producing reports outside of the financial system can result in reports that do not tie back to the system of record.

ACC017 Customer Statements

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Business Process Description The Customer Statement process is the process by which Central Accounting generates statements showing receivables by customer. Most of the receivable are relevant to ASDs for services provided by SCSD to support ASD functions. The ASDs are by far the largest “customer” that SCSD services and for which receives payment.


Business Process Details As-Is Inputs: None

As-Is Outputs: Customer Statement to show accounts receivables aging

As-Is Systems: APECS, ASD Access database



As-Is Reports: None


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Executive Summary The customer statement process was detailed in a business summary. The production of customer statements occurs twice a week and is how SCSD tracks its outstanding receivables from ASDs for which SCSD provides a multitude of services.

Process Issues

1. The receivables/customer statement report from APECS may be missing some information that SCSD would like to see on a customer statement.


• A new financial system will have customer statements delivered as part of the Accounts Receivable or Customer Maintenance module(s).

ACC018 GL Encumbrance/Payroll Accrual

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Business Process Description The Payroll Accrual process is the process by which Central Accounting generates the payroll and benefit costs that need to be booked in the year being closed, though the payroll which will distribute those payroll and benefit costs will occur in the new fiscal year. In many circumstances the accrual is for a few days at the end of June that occur after the final June payroll run and prior to June 30. Currently, Central Accounting is using a payroll encumbering/accrual process within APECS to generate the necessary accrual for payroll and benefits. In the past, several issues have occurred within the payroll encumbrance/accrual process that has caused issues in the new year regarding the ability to correctly find and offset the accrual reversals with the new-year payroll runs.


Business Process Details As-Is Inputs: None

As-Is Outputs: Accrual journal booking relevant expenses into the old year while creating appropriate accrual reversals into the new year.




As-Is Reports: None


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Executive Summary The year-end payroll encumbrance/accrual process was reviewed with Angela Carr and Toni Williams. The point of the year-end accrual process is to calculate and capture the payroll/benefits costs associated with the final days of the fiscal year that occur after the final year-ending payroll. These costs need to be booked into the year that is closing to correctly place the expenses in the period they were incurred. A subsequent reversal journal of the payroll/benefits accrual occurs in the new year to correctly reduce the payroll/benefit costs of the first payroll run of the new year.

Process Issues

1. The current processes within APECS payroll for producing the year-end accruals is multi-step and error prone. If not careful, the payroll process can skip the accrual generation and so in the New Year, the entire amount of payroll/benefit costs are booked into July.

2. System doesn’t easily handle persons on leave with no pay; also have issues of persons changing their payroll funding source for the new year (from one fund to another) so the create accrual reversal does not match-up to the new year payroll.

3. Very manual in nature. Business Process Recommendations

• SCS should select a new Financial/HR system that has better integration between Payroll and GL for the accrual of these costs at year end. Payroll should generate this accrual and it should be booked into the GL via an internal interface which doesn’t require central accounting to calculate how much should be accrued or ensure the accrual is correctly reversed.

ACP001 Vendor Payment with PO

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Business Process Description The Vendor Payment with PO is the process by which SCSD pays invoices submitted by vendors who have a purchase order for supplies or services. When an invoice is received, AP uses the information to find the matching purchase order and generates the Vouchers within APECS from the purchase order and invoice. The receiver of the goods must enter the receiver into APECS (AP acts as the receiver for most services). APECS will perform a 3-way match between the receipt, PO and Invoice. If all match correctly, APECS will assign a voucher number to the invoice data. Service invoices are usually associated with a contract and open PO for the contracted amount. Multiple incremental vouchers can be created against an open PO; requisitioners are not required to receive for services.

Business Process Steps Step # Step Description Executed By 1. Open, stamp and sort incoming mail/invoices twice a day. AP Staff 2. Review invoices for correct information – PO number and any special

signatures. AP Staff

3. Review taxes and discounts. If item is to be resold to students, staff or faculty, SCS will pay the taxes. Otherwise taxes are deducted from the invoice. If the vendor profile contains an agreed discount, APECS should pay the invoice in order to get the discount. There are times when APECS doesn’t calculate the discount so AP staff need to manually calculate and enter the discount amount on the voucher.

AP Staff

4. Enter the PO information into the Invoice entry screen along with the invoice number and date. If the PO is found, verify the vendor information pulled from the PO into the invoice screen matches that on the vendor’s invoice. Match the correct PO line information with the invoice amount and save the invoice. The system will create the voucher number.

AP Staff

5. If there is no PO on the invoice, AP will search APECS for a matching PO by location, item and cost that may match the vendor’s invoice. If found, the PO will be marked on the invoice and entry will continue as listed in step #4.

AP Staff

6. If there is no PO on the invoice and an existing PO cannot be located within APECS, AP will give the invoice to Purchasing who will contact either the requester or the vendor to ascertain the PO number. Should no PO exist, Purchasing will work with the vendor to obtain all the information to establish the vendor within APECS and create a valid PO.

AP Staff

7. If the voucher is for services, a contract should exist which identifies the type of work, cost, timeframe, etc. for the services. AP will review the contract to ensure the invoice is accurate. Most service contracts are tied to open POs which the invoice should reference. If the contract and Po are correct, the voucher will be created. There is no receiving for services built on an open PO.

AP Staff

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8. Once the voucher is created and saved, scan all relevant invoice information and attach the file to the invoice.

AP Staff

Business Process Details As-Is Inputs: Vendor invoice

As-Is Outputs: System generated Voucher




As-Is Reports: None



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Executive Summary The vendor payment with a PO process was discussed with Shirley Page and Sheila Gatson. The process is a standard vendor payment process when an institution requires a three-way match prior to paying an invoice. The three-way match occurs between the receipt, PO and invoice.

Process Issues Several items were identified that slow the process and introduce potential for mistakes.

1. APECS does not have an integrated contract system, so AP staff need to access contract info in a different system to check service agreements.

2. APECS cannot load invoices via a file or through scanning the invoice. 3. Creating PO Change Orders to modify a change order to match an invoice and receipt is too

time consuming. 4. It can take too long for a requisitioner to receipt their goods and enable the three-way match to

occur. Business Process Recommendations

• The system should offer the ability to receive invoices electronically from vendors so paper invoices are not needed. If a paper invoice is received, the ability to scan the invoice directly into the invoice screen would eliminate all the manual key strokes that can lead to errors.

• The system should send daily reminders to anyone with an open receipt to remind them to process their receiver.

• An integrated contract module should exist within the system. • A PO should be able to be created directly off an approved Contract.

Business Process Map Process map will not change from the current entry, match and pay process though it may be streamlined with reduced manual data entry and quicker matching.

ACP002 Vendor Payment without a PO

Documents

Enterprise Resource Planning Project Analysis pg 1...Business Process Analysis and Recommendations March, 2017 Enterprise Resource Planning Project