Do you still manage your finances the same way you did in 1984? The state of Florida does. In fact, the state’s accounting program is so old that new graduates aren’t prepared to work in it, because they stopped teaching it in schools decades ago.
The Florida Accounting Information Resource (FLAIR) is the state’s accounting system that manages more than $90 billion in transactions annually. A functional accounting system is an essential management function of any enterprise, but FLAIR is more than 30 years old and its serious inefficiencies are getting expensive.
To spend your tax dollars more efficiently, the state must know what it is spending money on. FLAIR’s capabilities just can’t tell us this money-saving information. For example, the state could analyze financial data and bundle contracts for a cheaper overall price, eliminate duplicative purchases, or simply find more efficient means to process transactions. Given FLAIR’s antiquated programming language, these analyses either take an inordinate amount of time or are impossible.
It’s not just the fact that the accounting system is inefficient and lacks analytic capabilities; if substantive updates are not made to FLAIR, the system is at risk of collapse. This could leave Florida physically unable to write a check, ruining consumer confidence and the state’s credit rating.
The need for this financial technology upgrade was recognized by the state more than 15 years ago, and the Florida Legislature attempted a new project to handle Florida’s accounting needs. Project Aspire cost taxpayers nearly $100 million over several years, and produced absolutely nothing. The failure to upgrade FLAIR was attributed to poor management and oversight, and conflicting expectations. The taxpayers’ $100 million investment went down the drain.
To protect our taxpayers from more waste, the next attempt to replace FLAIR must take a holistic approach with clear directives and realistic expectations to produce not only a functioning accounting system, but a state-of-the-art, sustainable financial framework. However, FLAIR is simply one component of the state’s financial management system.
The Florida Financial Management Information System (FFMIS) is comprised of several large software subsystems that operate payroll, purchasing, budgeting and accounting. These subsystems, which include FLAIR, have to work together and communicate to ensure smooth operation of the state’s finances. Each subsystem is functionally owned and managed by constitutionally separated and independently elected public officials. For example, Florida’s chief financial officer runs the accounting software (FLAIR), the governor manages payroll and purchasing, and the Legislature operates budgeting. Each subsystem has independently cost the state more than $100 million to develop and implement, yet they still don’t work together efficiently.
An Enterprise Resource Planning (ERP) platform is the solution that would develop an integrated financial system. Instead of operating independent subsystems, each financial management component would work together. While this would require significant investment from the Florida Legislature, the long-term sustainability of an integrated system would save far more than the cost of the independently operated, inefficient current system.
The 2013 Legislature was smart about strategizing the next steps for FLAIR and the FFMIS. They commissioned a study to weigh the realities of all the feasible options to update Florida’s financial operation management tool. The options on the table are to enhance or replace FLAIR, replace FLAIR and several other subsystems that are in need, or implement an ERP. The completed study has been delivered to the Legislature and will help make an informed decision about the future of Florida’s financial operations.
There is an obvious need for an upgrade to our state’s financial system. I am confident that an ERP is the best solution for the state and its taxpayers. It will require a large upfront investment and the commitment to see the project through to its implementation, but the resulting savings and efficiency improvements will pay dividends for years to come.
The Legislature should assess the results of the study and make the necessary upfront appropriation to see this project through.
Pat Neal was a Florida state senator from 1978-86, chairing the Senate Appropriations Committee. He is current president of Neal Communities, a Sarasota-based real estate development company. Pat is a volunteer board member of the independent, nonpartisan Florida TaxWatch Center for Government Efficiency. Column courtesy of Context Florida.