Friday, March 11, 2011

House Approves Financial Efficiency Proposal

The House has approved legislation designed to transform inefficient state agency financial services systems.

House Bill 2107, by Rep. Jason Murphey, (R-Guthrie), Rep. Josh Cockroft, (R-Tecumseh) and Senator Anthony Sykes (R-Moore), was proposed following a report by the Hackett Group, which demonstrated massive inefficiencies in the way state agencies conducts financial services.

The report compared Oklahoma agencies’ financial services processes to that of other public and private sector peer organizations of like complexity.

The report demonstrated the inefficiencies by stating that it costs Oklahoma taxpayers $20.05 to process one accounts payable invoice while comparable peer groups pay $3.58 for each similar service.

“It is incredible and unacceptable that Oklahoma taxpayers are paying nearly six times the cost of what comparable groups are spending for that same process,” Murphey declared. “This legislation is designed to fix that!”

The study also stated that Oklahoma state government has a significantly higher number of full time employees employed to conduct these operations than peer organizations.

Oklahoma processes 2,039 accounts payable occurrences for each employee while peer groups are able to account for 15,693 of these same processes with each employee.

“The legislation will require the most inefficient agencies to enter into a shared service agreement to modernize their financial services,” Sykes explained. “The proposal also incentivizes state agencies that become efficient to avoid the necessity of a shared services arrangement and allows them to preserve autonomy of operation.”

A 2010 version of the legislation was passed by the legislature but vetoed by the then-Governor Brad Henry. The House approved House Bill 1207 by a vote of 91-3. The legislation now heads to the Senate for additional consideration.

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