Date Requested:February 22, 2011
Time Requested:10:21 AM
Agency: Auditor, State of WV
CBD Number: Version: Bill Number: Resolution Number:
2011R2834 Introduced HB3204
CBD Subject: WV ENTERPRISE RESOURCE PLANNING BD & EXEC. COMM
FUND(S)
Enterprise Rersource Fund
Sources of Revenue
Other Fund NA
Legislation creates:
A New Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    This legislation has zero fiscal impact on the cost and revenues of state government as it does not increase any expenditure nor generate a determinable amount of revenue. The sole purpose of the bill is to codify the current governance structure established by Executive Order no. 15-09, signed September 4,2010.
    
    The Legislature has appropriated approximately 30 million dollars (Excess Lottery Funds) for the acquisition, implementation, and ongoing support of a new ERP system. It is our understanding that another 15 million dollars (General Revenue – Surplus) has been requested for FY 2011. This Legislation (HB 3204) creates an ERP Governing Board comprised of the Governor, the State Auditor, and the State Treasurer to oversee and direct the ERP project. Additionally, the legislation provides for the transfers of all current ERP appropriation balances to the control of the ERB board.
    
    The legislation does, however, authorize fees to be collected in accordance with Legislative Rules and deposited into a newly created Enterprise Resource Fund. The ERP project itself is a highly complicated project that will have an implementation time frame of approximately five (5) years and an expected useful life of twenty-five (25) plus years. It is not expected that the Board will charge any fees, until the Financial Modules functionality of the ERP system is up and operational. With the current projected timeline, the Financial Modules (phase I) are expected to go live at the beginning of FY 2014.
    
    With respect to any fees charged, federal regulations require cost to be allocated equitably among benefiting agencies. In the event that varying benefits can be documented, then multiple cost pools may be established to allocate the cost pool based on different factors that result in a more equitable distribution of cost. Ultimately, the charge rate and allocation method cannot be determined until various decisions are made regarding the project scope and the levels of functionality that the state will ultimately acquire and implement. Once those decisions have been made, it is the Board’s intention to communicate with the Division of Cost Allocation (DCA) of the United State Department of Health and Human Services and to advise them that the State plans to implement an ERP system and to obtain any guidance that the DCA representatives have to offer regarding the documentation of costs or other relevant matters.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    
    
    
    
    
    
    


Memorandum
Person submitting Fiscal Note:
Todd Childers, Deputy State Auditor
Email Address:
todd.childers@wvsao.gov
    It should be noted that the State is in the middle of the solicitation process to procure software and implementation services related to a state-wide ERP system. The RFP was released January 14, 2011 and bid are expected to be opened on April 6, 2011.