GG 43
Consolidate Small Agency Information Technology Services
Summary
The Texas Department of Information Resources should provide information technology services for small state agencies (those with fewer than 100 full-time equivalent employees). This would improve the quality of these services while reducing the state’s costs.
Background
State law requires agencies to employ an information resources manager (IRM) to prepare information resources strategic plans identifying information technology (IT) projects and to prepare biennial operating plans outlining technology costs for submission to the Legislative Budget Board. Agencies also must budget for and administer their own IT services.[1] Small state agencies (those with fewer than 100 full-time equivalent employees), however, face unique challenges in carrying out their IT functions because they generally lack the staff, training and resources needed to keep up with and make the best use of rapidly changing technology.[2]The State Auditor’s Office (SAO) has recommended that the Texas Department of Information Resources (DIR) consolidate and oversee IT services at small agencies. These agencies would benefit particularly from the consolidation of e-mail, Web site development and maintenance programming and database support.[3]
IT services in small agencies
At many small agencies, the executive director, chief operating officer or other administrative staff members perform core duties while also handling all aspects of their agency’s IT operations, including the purchase of hardware and software, the establishment of computer-driven operations and equipment maintenance, either directly or through contractors. Often these operations are a secondary consideration to the employees’ primary jobs. Because of the rapid pace of technological change, such “part-time” technical personnel find it difficult to keep up.In general, small agencies neglect important IT planning, asset management, training, security and operational functions. As a result, their IT does not support the agencies’ core business functions adequately and prevents them from providing services to citizens over the Internet.
Although DIR has a Security Office to assist agency IRMs, small agency personnel generally lack the knowledge and training needed to be effective security administrators. Small agencies also tend to overspend on security hardware and software, when the smallest “firewall” installation—software that protects the security of agency data—could be sufficient for several such agencies.[4]
According to a 2001 Sunset review, the Texas Funeral Service Commission (TFSC) lacks a functioning computer system for its regulatory functions. DIR found that TFSC’s regulatory application and database contained minimal information about funeral industry licensees and did not help TFSC staff manage license processing or prepare management and legislative reports.[5]
DIR assisted TFSC in upgrading to newer computers that can support regulatory software applications. TFSC data was transferred to a new software package and the software vendor provided conversion and implementation services, which included routine software maintenance and upgrades. This allowed TFSC to improve some of its operations, but it still lacked the skills needed to identify new needs, improve internal operations and maintain the existing systems.
Small agency IT spending
In February 2003, DIR reviewed the IT spending of 52 state agencies with 100 or fewer FTEs and found that they spent a total of $9.6 million for IT-related equipment, software and services in fiscal 2002. These expenditures include such IT functions as security, e-mail, Web site hosting, local area network services, system administration services, servers, personal computer management and applications support.[6]Agencies included in the DIR review are listed in Exhibit 1.
Exhibit 1
Agencies Included in the Department of Information Resources’ ReviewSource: Texas Department of Information Resources.
Aerospace Commission Funeral Service Commission Aircraft Pooling Board Incentive and Productivity Commission Board of Barber Examiners Juvenile Probation Commission Board of Chiropractic Examiners Law Enforcement Officers Standards and Education Board of Dental Examiners Office of Consumer Credit Commissioner Board of Examiners of Psychologists Office of Rural Community Affairs Board of Nurse Examiners Optometry Board Board of Pharmacy Physical and Occupational Therapy Examiners Board of Professional Land Surveying Public Finance Authority Board of Tax Professional Examiners Racing Commission Board of Vocational Nurse Examiners Real Estate Commission Bond Review Board Savings and Loan Department Cancer Council Securities Board Commission for the Deaf and Hard of Hearing State Board for Educator Certification Commission on Fire Protection State Board of Plumbing Examiners Commission on Human Rights State Board of Podiatric Medical Examiners Commission on Jail Standards State Commission on Judicial Conduct Commission on the Arts State Law Library Cosmetology Commission State Pension Review Board Court Reporter Certification Board Structural Pest Control Board Council on Environmental Technology Telecommunications Infrastructure Fund Board Credit Union Department Texas Commission on Private Security Criminal Justice Policy Council Texas Department on Aging Ethics Commission Texas Military Facilities Commission Fire Fighter's Pension Commission Veterans Commission Food and Fibers Commission Veterinary Medical Examiners
Recommendation
Section 2054 of the Government Code should be amended to require the Texas Department of Information Resources (DIR) to consolidate and manage information technology (IT) services for small state agencies.DIR should conduct an asset inventory and an evaluation of IT service requirements at these agencies and prepare a plan for providing these services. The consolidated services should include, at minimum, security, e-mail, Web site hosting, local area network services, system administration services, servers, personal computer management and applications support.
DIR should develop a detailed consolidation plan including service delivery methods and implementation schedules. This should be used to develop service agreements with each agency so that consolidation can be completed by the end of fiscal 2004.
DIR’s costs would include contracted management of personal computers, printers, and servers; software license maintenance; telecommunications; supplies; application support; and contract management.
DIR would require one information resource manager (IRM) to serve all agencies participating in the initiative so that each agency would not need to maintain their own. The IRM would create the detailed consolidation plan; develop service agreements; oversee the migration; evaluate, acquire and oversee service delivery; and create and submit an information resources strategic plan, biennial operating plan, funding requests and other required reports on the agencies’ behalf.
DIR also should coordinate the formation of a Small Agency Information Resources Users Group to facilitate communication and the exchange of information pertaining to small agency IT issues.[7]
Fiscal Impact
Based on information obtained from the 52 agencies’ biennial operating plans, about $9.6 million was spent on IT equipment, software and services in fiscal 2002. It is assumed that this spending level will be 12.5 percent lower beginning in fiscal 2004, because the 2003 Legislature required all agencies to reduce overall spending by that amount. This would result in cumulative IT spending for the 52 agencies of $8.4 million per year beginning in fiscal 2004.[8] The estimate assumes that funding levels for small-agency IT functions will remain level in future years.DIR would need additional employees to implement the consolidation plan. This would include nine FTEs in fiscal 2004 to conduct the analysis and set up the required technology and systems. Small agency consolidation would take place at the beginning of fiscal 2005; thereafter, DIR would require an additional 13 FTEs, for a total of 22 (Exhibit 2).
Exhibit 2
Additional Staffing Needs at DIRSource: Texas Department of Information Resources.
Fiscal Year Additional FTEs Additional Salary Costs Additional Benefit Costs Total Staff Costs Additional Staff Costs Total Staff-related Costs 2004 9 $500,000 $142,300 $642,300 $89,910 $732,210 2005 22 $1,325,000 $377,095 $1,702,095 $198,520 $1,900,615 2006 22 $1,325,000 $377,095 $1,702,095 $198,520 $1,900,615 2007 22 $1,325,000 $377,095 $1,702,095 $198,520 $1,900,615 2008 22 $1,325,000 $377,095 $1,702,095 $198,520 $1,900,615 DIR would need an additional $4.4 million to provide small agency telecommunications, software licenses, PC leases and maintenance and supplies beginning in fiscal 2005.
Total costs for the consolidation initiative in fiscal 2004 would be $732,210. Beginning in fiscal 2005, $6.3 million of small agency IT budgets (from a total of $8.4 million) would be transferred to DIR ($1.9 million for staff costs and $4.4 million for professional services). The remaining $2.1 million would represent savings to the General Revenue Fund. The initiative would result in the reduction of 11 FTEs (33 FTE reductions at small agencies against 22 new FTEs at DIR).
To realize these savings, a rider to the General Appropriations Act should reduce small agency budgets by the amounts they receive for IT. The portion of those funds needed for DIR to staff and operate the initiative would be transferred to DIR, with the remaining going to the General Revenue Fund.
Fiscal Year Savings/(Cost) to General Revenue Change in FTEs 2004 ($732,000) +9 2005 $2,100,000 -11 2006 $2,100,000 -11 2007 $2,100,000 -11 2008 $2,100,000 -11
Endnotes
[1] Tex. Gov’t. Code Ann. §2054.075(b).
[2] Texas Comptroller of Public Accounts, e-Texas: Smaller, Smarter, Faster Government, Volume 1 (Austin, Texas, December 2000), p. 199.
[3] Texas State Auditor’s Office, Addressing Operating Risk and Improving the Efficiency of Texas State Government (Austin, Texas, February 2003), p. 19.
[4] Texas Department of Information Resources, Catalyst for Government Transformation (Austin, Texas, November 1, 2002), p. 24.
[5] Texas Sunset Advisory Commission, Funeral Service Commission Staff Report (Austin, Texas, November 2000), p. 9; and materials provided by the Texas Department of Information Resources, March 20, 2003.
[6] Materials provided by the Texas Department of Information Resources, March 20, 2003.
[7] Materials provided by the Texas Department of Information Resources, March 20, 2003.
[8] DIR identified IT spending for each agency based on a review of 2003 Biennial Operating Plans. The $9.6 million was 87.5 percent of the total; the reductions accommodates for reduced 2004-05 agency spending levels required by the Legislature.
