Program Review and Investigations Committee




<MeetMDY1> November 13, 2014


Call to Order and Roll Call

The<MeetNo2> 1st meeting of the Program Review and Investigations Committee was held on<Day> Thursday,<MeetMDY2> November 13, 2014, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Representative Martha Jane King, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Christian McDaniel, Co-Chair; Representative Martha Jane King, Co-Chair; Senators Tom Buford, Perry B. Clark, Ernie Harris, Jimmy Higdon, Dorsey Ridley, Dan "Malano" Seum, and Whitney Westerfield; Representatives Leslie Combs, Jim DeCesare, David Meade, Terry Mills, Rick Rand, and Arnold Simpson.


Guests: William Summers V, Vice Chairman, Jim King, Board Member, Louisville Arena Authority; Dennis Petrullo, General Manager, KFC Yum! Center; Clifford “Rip” Rippetoe, President of the Kentucky State Fair Board (KSFB); Janet Lile, Executive Director, Office of Enterprise Technology, Commonwealth Office of Technology and Finance and Administration Cabinet; Walt Gaffield, Executive Director, Office of Administrative Services, Personnel Cabinet.


LRC Staff: Greg Hager, Committee Staff Administrator; Christopher Hall; Van Knowles; Jean Ann Myatt; William Spears; Shane Stevens; Joel Thomas; Kate Talley, Committee Assistant.


Response to staff report Kentucky State Fair Board. [Presented at October 9 committee meeting]

Jim King, William Summers, and Dennis Petrullo appeared before the committee. A handout from the Louisville Arena Authority (LAA) was distributed to committee members. Mr. King stated that the KFC Yum! Center is a partnership of Metro Louisville, the state, and the volunteer arena board that has taken responsibility for its fiscal management. The board has responsibility for the repayment of $350 million in bonds; the state has no further risk. The initial state involvement in the project was $75 million to acquire the sight for construction of the arena. Since then, an agreement has been in place with 80/20 percent sharing of revenue from the tax increment financing (TIF) district surrounding the arena. TIF revenues received thus far have been a fraction of what was initially forecast. Metro government and city taxpayers have covered the shortfall. Metro government has a minimum $6.5 million fixed payment annually, with an agreement to backstop cash flow problems with an additional $3.3 dollars annually. For the past three years, the city has had to pay its maximum guarantee of $9.8 dollars to allow LAA to make its bond payments.


Most of the arena’s cash flow problems can be traced to its initial management by the Kentucky State Fair Board (KSFB) in 2010, 2011, and part of 2012. Under management of KSFB, net losses from operations were $3 million. Under AEG’s management in part of 2012 and 2013, net profits were $3 million. General administrative expenses under management of KSFB were more than triple the cost under AEG. One could argue that the arena started out $10 million under water under its original management structure.


The Attorney General is looking into the legal rights and responsibilities of all parties involved with respect to the negative impact between the KFC Yum! Center and KSFB. Mr. King read note C of LAA’s 2013 audited financial statements that explains the history and current status of LAA to KSFB [page 7 of handout]. The main points are that KSFB proposed to settle all debts for fees, expenses, and negative impact reimbursement for Freedom Hall for $1.47 million in May 2013. KSFB subsequently informed LAA that it did not intend for the settlement to include the Freedom Hall negative impact reimbursement, the value of which KSFB claims is $7.2 million. LAA made an initial payment of $100,000 against the $1.47 million settlement in October 2013. LAA’s position is that the Freedom Hall reimbursement provisions of the management agreement, adopted from the state budget bill of 2006, expired with the termination of the management agreement.


Those who voted for the bill assumed that there would be a measurable shift of income from Freedom Hall to the KFC Yum! Center when the arena was built, but this has not occurred.


KSFB managed to lose money at both locations from the 2010 opening of the KFC Yum! Center until AEG took over in 2012. The KFC Yum! Center lost $3 million under KSFB management and incurred $9 million in general administrative costs; much of it allocated from KSFB. With proper fiscal management and gradually increasing TIF revenues, the arena operation is profiting under AEG management and Metro Louisville support at its maximum level. Money for the next two bond payments is in the bank.


LAA and KSFB have a wonderful partnership. The Louisville Convention and Visitor’s Bureau commissioned an independent economic study of the KFC Yum! Center last May. The results indicated a positive impact with $500 million supporting 8,400 jobs and attendance averaging more than 50 percent from outside Jefferson County. The University of Louisville (UL) lease has been criticized, but the arena bonds could not have been sold otherwise. UL has been flexible with respect to other arena events. The request to downsize the arena TIF distract was because it was so large that there was no approximate relationship between the arena and nearly 80 percent of the business included. Whiskey Row and Brown Forman’s recent announcement of its new distilling operation would not have happened without the KFC Yum! Center. The arena has become a nationally recognized basketball arena chosen by the NCAA for the men’s regional tournament. The center has been transformative to downtown Louisville and the state.


Clifford “Rip” Rippetoe appeared before the committee.


In response to a question from Representative DeCesare, Mr. King said that LAA collects 80 percent of TIF revenue within the KFC Yum! Center’s TIF district.


In response to questions from Senator McDaniel, Mr. King confirmed that the profit shown on page 8 of the handout does not include TIF district revenue, debt payments, or depreciation. Interest payments are around $19 million. Up to $9.8 million falls to the taxpayers of Louisville. Advertising revenue not included in profit plus TIF revenue plus profit equals roughly $22 million.


In response to a question from Senator McDaniel, Mr. King said there is a ceiling on how much arena revenue can grow. Mr. Petrullo said growth in arena revenue will come from sponsorships and naming rights. Profits from arena operations have stabilized. Heaven Hill recently increased the length of its sponsorship by 10 years.


In response to a question from Senator McDaniel, Mr. King said that less than $10 million of the bond principal has been paid. No refinancing has been done.


In response to a question from Senator McDaniel, Mr. King explained that UL has a long-term lease that includes a revenue sharing arrangement. UL controls the suite revenues and is in charge of finding tenants for the suites. Mr. Petrullo said that UL pays $4 million in rent; it is considered an anchor tenant.


In response to a question from Senator McDaniel, Mr. King explained that net negative reimbursement was part of the 2006 budget bill. When the operations management agreement was signed by KSFB and LAA, the provisions in the budget bill were incorporated by reference in the agreement and became contractual obligations. When the management agreement was terminated on June 30, 3012, the contractual relationship ended, as well as future reimbursements. The General Assembly anticipated that there would be a windfall due to Freedom Hall from the KFC Yum! Center, but that did not happen. Even if there were to be payments, according to the cash flows in the bond documents, payments would not be payable until 25 years from now. LAA is awaiting the Attorney General’s opinion on the matter.


Mr. Rippetoe said that KSFB and LAA have a great working relationship; KSFB has a contractual relationship with AEG supplying venue services for them. Receiving its direction from the Finance and Administration Cabinet, KSFB’s position is that, based on the indentured documents and loan documents, the calculation of net negative impact still needs to be done.


In response to questions from Senator Seum, Mr. Petrullo confirmed that the 138 events referenced on page 11 of the handout correlate to the number of days of usage. Usage of the KFC Yum! Center is comparable to that of facilities in similarly sized markets.


In response to a question from Senator Seum regarding the ownership structure, Mr. King confirmed that the corporation alone is responsible for the debt. Insurance was purchased through a company called Assured to pay off the bonds in the event of default.


In response to a question from Senator Buford about specific problems with KSFB’s management of the KFC Yum! Center, Mr. King referenced page 8 of the handout. The arena did not open until October 10, 2010, but incurred more than $3 million in general administrative expenses under KSFB management in 2010. Mr. King questioned this and suggested that some cost shifting occurred.


In response to a question from Representative Meade, Mr. Rippetoe said that KSFB cannot survive without state appropriations since the UL basketball teams left. Aging facilities are among the ongoing problems.


Representative King stated that it is good to see both entities working well together to resolve issues.


Mr. King stated that LAA has conducted two audits of the UL lease.


Minutes for October 9, 2014

Upon motion by Senator Buford and second by Senator McDaniel, the minutes for the October 9, 2014, meeting were approved by voice vote, without objection.


Upon motion by Senator McDaniel and second by Senator Buford, the Kentucky State Fair Board report was adopted by a roll call vote.


Staff Report: Information Technology In Kentucky State Government

Ms. Myatt stated the 9 major conclusions of the report:

·        Technology is not as visible an asset as personnel or physical infrastructure but is important to government functioning and is changing and growing rapidly. Sometimes technologies are perceived as inappropriate or outdated when they are not. Misunderstandings could be reduced by improved communication and training.

·        Some old systems work well but suffer from lack of support, inflexible programming, user interfaces that are difficult for younger workers to use, and inefficient operation. Replacing such systems would make staff more productive and free resources for other purposes.

·         For large information technology systems that are inappropriate or out of date, agencies have submitted multiple replacement requests that have gone unfunded.

·        When smaller information technology needs have gone unmet, such as obsolete equipment, it has usually been due to budget limitations.

·        The Commonwealth Office of Technology (COT) is focused on consolidating infrastructure equipment and support, which seems likely to save money. COT has also interceded with agencies’ business applications plans to ensure standard development methods, sharing of common solutions among agencies, and improved access to data between agencies. These efforts should make state government functions more efficient.

·        The state might be able to save money by making changes to attract, hire, and retain more information technology employees rather than contracting for information technology (IT) staff. On capital projects, improved procurement and project management procedures might reduce losses from cost overruns and delays.

·        Accounting for information technology expenditures on goods and services is improving but still imprecise; the amounts spent for technology staff cannot be determined using available information.


·        There is little information to assess the state’s progress in improving technology, but data from this study can serve as a baseline for future comparison.


The types of IT assets considered for this study were infrastructure—the equipment used to accomplish IT tasks; business applications—the systems of software and associated equipment used to perform agency business activities; Web presence—the websites that connect state government to the public; and IT Personnel. Business applications can be agency specific or enterprise-wide applications, such as eMARS and KHRIS, used by agencies across state government. Agency applications are used exclusively by one agency or are shared among a small number of related agencies. Examples are KAMES [Kentucky Automated Management & Eligibility System] housed in the Cabinet for Health and Family Services (CHFS) and AVIS [Automated Vehicle Information System] used by the Transportation Cabinet, county clerks, police, and others.


By KRS 42.726, COT has ultimate oversight authority of most executive branch agencies’ information technology assets. The legislative and judicial branches of government are exempted from COT authority under KRS 42.728(2) and 42.728(3). Exempted agencies may choose to contract with COT to meet their technology needs. For example, the Office of the Attorney General has chosen to participate in COT’s Infrastructure Consolidation Initiative.


Legislative IT oversight is through the Capital Planning Advisory Board and the Capital Projects and Bond Oversight Committee. When an expected expenditure is $600,000 or more, the board advises agencies in all three branches of state government on IT systems. The board submits a state capital improvement plan by November 1 of each odd-numbered year to the governor, chief justice, and LRC. State agencies are required to provide the Capital Projects and Bond Oversight Committee quarterly status reports on ongoing capital projects, including capital IT projects. The committee has the authority to review the progress of capital projects and approve interim fund transfers and bond issues.


Program Review staff administered two surveys for this study. The first, primarily asking policy questions, was sent to cabinet and department leaders. The second, covering more technical IT questions, was sent to agencies at the department level with instructions to collect detailed information from the appropriate staff.


Mr. Thomas said appropriateness of technology in state government includes age, funding, the IT workforce, standards and consolidation, procurement and project management, and security. These factors affect the selection, design, scope, and frequency of replacement of technology solutions.


Usability is similar to how appropriate and up to date technology is within its intended purpose. Systems and applications that can be used across the enterprise or several agencies are developed on standardized platforms and are guided by standardized procedures and in-depth consideration of agencies’ business needs. These systems are said to have greater interoperability; they have been designed to communicate and share data with other systems. Consolidation of IT resources, including management, may reduce costs through greater economies of scale and increased system usability.


Silo applications and systems, in which contents are kept separately, are typically older and were developed in a mainframe-driven environment. Data in silo systems are difficult to share. COT has developed enterprise standards to increase data accessibility and reduce duplication.


The consolidation of IT infrastructure by COT is being conducted in phases, with agencies at varying degrees of completion. Some agencies may pay more for IT infrastructure after consolidation, primarily because agencies were previously using older infrastructure. The replacement and refresh cycle for IT infrastructure is standardized under consolidation. COT is aware that its billing statements are sometimes difficult to interpret and verify. Some agencies have developed systems that facilitate the billing process. COT has proposed using those systems at other agencies to alleviate future billing issues.


Support response times have been reported as being slower following consolidation. Response times prior to consolidation were not documented, however; so it is difficult to make a comparison. Agencies reported that procurement is an issue because of the time it takes to go through the process with COT. Agencies also noted that COT’s support for specialized infrastructure was not as effective as in-house support.


Recommendation 2.1 is that COT should take steps to ensure that the needs of other agencies are being met and concerns are being addressed related to infrastructure costs, support services, specialized business needs, business applications, and billing the agencies.


Agencies reported on both technology surveys that funding was the greatest challenge to IT infrastructure and applications. The appropriation for capital IT projects in the 2014 budget was one half of what COT recommended. Of the $99 million appropriation, $70 million went to the Next Generation Kentucky Information Highway project.


State agencies frequently use contractors instead of hiring permanent staff because salaries for state IT positions are not competitive with private sector salaries. Contractors are flexible and do not receive state benefits, so policy makers must consider overall cost. However, agency leaders must consider that contractors may not have the familiarity with systems and processes that an in-house agency employee may have.


Recommendation 2.2 is that the Personnel Cabinet, in consultation with the Finance and Administration Cabinet and other agencies, should conduct a classification and compensation study assessing the overall cost of equalizing IT compensation with private industry compared to the cost of continuing to use IT contractors, taking into account such factors as contractor flexibility.


More than 37 percent of agencies reported reviewing their business processes regularly. Almost 63 percent stated that business process reviews were only conducted when technology changed or there was a need. COT’s involvement in agency business process planning and review is crucial.


When agencies are developing requests for proposals (RFPs) for IT resources, the Office of Procurement Services can offer assistance, for example, helping draft appropriate language. COT also assists agencies with IT specific RFPs and may offer alternatives to contracted services. Agencies should seek the advice of the Office of Procurement Services and COT from the beginning of the decision making process. In the past, Kentucky has experienced cost overruns and delays with some IT contracted services.


It is important that agencies actively manage their own IT projects. COT recommends that agencies have either a certified project manager for IT procurement or staff who have previous experience with similar projects. However, currently there are no policies or requirements that specify agencies must use qualified project managers. Previous cost overruns and delays may have been the result of passive project management.


Recommendation 2.3 is that the Finance and Administration Cabinet and COT should ensure that all agencies consult with COT at the earliest stages of considering new or updated business applications and that all agencies develop their procurement and project designs with input from COT and the cabinet’s Office of Procurement Services.


Recommendation 2.4 is that the Finance and Administration Cabinet and COT, at their discretion, should ensure that all agencies employ certified or experienced project managers for capital IT projects. COT should actively review and measure the progress of such projects and maintain records to develop evidence based best management practices.


Attacks on IT systems are increasing. Although Kentucky has not reported any major security breaches, the Auditor of Public Accounts found IT security vulnerabilities. Agency leaders and staff, not just specialists, must become aware of potential threats for effective security across the enterprise. House Bill 5, enacted in 2014, included provisions for reporting security breaches. Ten agencies reported breaches that would have required reporting under House Bill 5.


Recommendation 2.5 is that COT should ensure that all agencies prioritize technology security initiatives and maintain continuing communication and training for their staff on evolving threats and best practices to safeguard sensitive information in their keeping.


Mr. Stevens said that technology assets include technology infrastructure, enterprise business applications, agency business applications, and Web presence.


Infrastructure assets include desktops and workstation computers, access to the Internet, local networks, and communications technology. Each of these assets were evaluated in terms of effectiveness, efficiency, ease of use, reliability, user satisfaction, technical support, and whether it is up to date. The assets were rated by agencies on a scale of 1 to 5, with 1 being very low and 5 being very high. Overall asset ratings ranged from 3.58 to 3.78—between moderate and high.


Program Review technology surveys also asked agencies to evaluate the statewide accounting system eMARS and the statewide human resources system KHRIS in terms of how well the systems are meeting their current business needs. Approximately 57 percent of responding agency leaders agreed that eMARS is meeting their agency’s business needs, while 19 percent reported that it is not. Approximately 48 percent of responding agency leaders agreed that KHRIS is meeting agency business needs; 32 percent reported that it is not.


eMARS received an overall rating of 3.57; KHRIS received an overall rating of 3.31—between moderate and high. Eighty-two percent of agencies reported that KHRIS was of high importance; 91 percent of agencies reported that eMARS was of high importance.


Program Review staff also conducted focused examinations of eMARS and KHRIS. eMARS is the statewide accounting system of record for the Commonwealth. Supported accounting functions include procurement, purchasing, payables, receivables, revenue, general ledger, fixed asset, and budget management functions. eMARS was launched in July 2006 at a cost of approximately $10 million. The annual operating cost of the system is approximately $7.7 million. Notable accomplishments of eMARS include reliability, as cabinet officials predict that eMARS could continue indefinitely with appropriate support; a fast response time and limited downtime; and a clean audit history since its implementation.


A number of eMARS deficiencies were identified by Program Review staff and reported by agencies. Three examples documented in the report are that there is no link between contracts and renewals; vendor invoices are unavailable within the system; and master agreement balances are incomplete. Information in eMARS is frequently incorrect or missing. Program Review and agency staff also discovered a security deficiency with the data warehouse reporting tool, InfoAdvantage, which is not part of eMARS but is an application with which it interfaces regularly.


Several agencies reported difficulties using eMARS. As a result, agencies have supplemented eMARS with manual or electronic procedures that often require significant additional work. Most supplemental applications require staff to enter duplicate information and carry out duplicate procedures. These could be made more efficient if agency applications were allowed to interact with eMARS. The Finance and Administration Cabinet strictly limits agencies’ use of eMARS interfaces, but it would be beneficial to discover the full extent of agencies’ unmet business needs and determine how to meet them.


Recommendation 3.1 is that COT should work with the Office of the Controller and the agencies that use the statewide accounting system to elicit all the supplemental procedures and business applications that agencies use to meet their accounting needs. The offices should identify the reasons that agencies supplement the accounting system and develop solutions so that agencies may use the accounting system more efficiently.


KHRIS, the state government human resources system, maintains personnel and organizational data and performs timekeeping, payroll, and benefits functions. In 2007, IBM contracted to develop a replacement for the previous personnel system. After a contract extension and project delays, the contract with IBM was canceled in 2009. The Personnel Cabinet assumed responsibility for project management and contracted with SAP to carry out the implementation of the system. KHRIS went live in April 2011 with core functionality but without some features from the original project plan. KHRIS cost approximately $50 million to implement and $8 million to operate annually.


Notable accomplishments of KHRIS include replacing approximately 25 distinct personnel, payroll, and timekeeping systems at the time of its launch and improving on a number of processes that have led to lower costs and more efficient personnel management. The lack of a self-service timekeeping function was mentioned as a problem area by various agencies. The Personnel Cabinet reports that this functionality is currently in development.


Most agencies have at least one, often several, agency-specific business applications that facilitate their provision of services or manage their operations. Many were purchased and others were developed specifically for the agency. Program Review staff conducted focused examinations of two agency business applications: KAMES and AVIS.


KAMES is a 21-year-old mainframe system that supports eligibility determination for many of the state’s public assistance programs such as the Supplemental Nutrition Assistance Program and Medicaid. The annual operating cost of the system is approximately $11.6 million. According to the Cabinet for Health and Family Services, KAMES has performed well during its lifespan and continues to do so. Cabinet officials attribute this to a number of factors but place special emphasis on the original project management process, which entailed a high degree of vendor oversight and staff involvement.


KAMES has developed deficiencies, which include an interface that makes training more difficult and administration more time consuming, less automation than modern systems, inflexible technology that requires new programming to accommodate regulatory or business process changes, and increased costs associated with maintenance and support.


AVIS was developed in 1981 and is maintained by the Transportation Cabinet to collect title and registration information on vehicles. The system was developed by McDonnell Douglas and costs approximately $3.7 million annually to maintain and support. According to cabinet officials, AVIS has and continues to function reliably and securely with fast response times and 24-7 up-times for users across eight state cabinets.


The age of the system has created a number of deficiencies for current use similar to those for KAMES. A replacement for KAMES is underway, and the system will be fully phased out by December 2015. In May 2009, the cabinet entered into a contract with 3M Motor Vehicle Systems to develop the replacement, but the contract was terminated in May 2014. The cabinet is in the process of completing the replacement system with its own staff.


Agencies were asked to evaluate the performance of their Web presence along a number of criteria as well as its importance to the agency. The agencies reported that their Web presence is performing well, is of high importance, and is serving a variety of functions ranging from promoting the agency to conducting business directly with the public. All but two of the responding agencies reported that they currently had a public Web presence.


Mr. Knowles said that the inventory and cost of technology are difficult to determine. At this time, there is no firm inventory of state government technology equipment, software, or personnel. COT is in the process of consolidating infrastructure assets and support personnel. As it does, COT is taking an inventory of infrastructure equipment and software. All infrastructure support personnel are being transferred to COT. At the end of the process, there should be a reliable inventory of infrastructure assets. Many agencies develop or purchase their own business applications. As part of the infrastructure consolidation, COT is developing a list of agency business applications. Agencies also have personnel who manage and support their business applications, but there is no exact count of employees and contractors who perform IT tasks. Tracking these personnel is not part of the consolidation process.


In eMARS, the purpose of a payment is shown by its object code. Agencies vary in the way they use object codes for IT expenses. They sometimes use object codes that are not for technology. Staff examined a sample of IT payments and found that 38 percent used non-IT object codes. After infrastructure consolidation, COT will have sole responsibility for infrastructure purchases. COT has demonstrated good use of object codes. However, other agencies will continue to have IT expenses they code themselves. Analysis of their use of object codes indicates that agencies need better descriptions of object codes and they would benefit from feedback about their use of object codes.


Recommendation 4.1 is that the Finance and Administration Cabinet should produce and maintain a document explaining the intended use of each object code in the statewide accounting system. The cabinet should implement an ongoing process to periodically examine and validate samples of payments from all agencies and take corrective action when patterns of miscoding are found.


It is difficult to determine personnel IT costs, both for state employees and contractors. This is a challenge shared by other states. For state employees, it is possible that staff in non-IT job classifications spend significant time on IT tasks. Staff in IT job classifications might spend significant time on non-IT tasks. Furthermore, the accounting system does not have a record of payroll costs by individual; rather, it has payroll costs for departmental units. Contractor costs might be easier to track, but there is a need for new object codes to distinguish IT from non-IT tasks for contractors.


Recommendation 4.2 is that COT should work with the Finance and Administration Cabinet and the Personnel Cabinet to develop a means to calculate the number of full-time equivalent personnel and the costs associated with information technology work by state employees.


In response to a question from Representative King, Mr. Knowles explained that the inventory issue includes there being no central record of what information technology work is done in house and outsourced. When COT has completed their infrastructure consolidation, there may be a list of all of the business applications, equipment, and software available.


Representative DeCesare commented that in his years in the legislature, technology is the subject most ignored by the General Assembly, especially in terms of budgeting. It is shocking that there is not an inventory of technology assets. We need to rely on the experts more regarding contracts. We should look to universities to see how their infrastructure is working. “Technology” should be incorporated into the name of the Economic Development and Tourism Committee.


In response to questions from Senator Westerfield, Program Review staff will look further into the annual costs for the four reviewed agency business applications and request more detailed cost breakdown from the agencies. The completion date of the inventory of technology assets may be better answered by COT. The response rates to the surveys done by Program Review staff were between 85 and 90 percent of agencies. Appendices C and D have more information related to the surveys.


In response to questions from Senator Higdon, Mr. Knowles said that staff did not look at KyNect for this study. The term paperless was discussed only when agencies mentioned it as a goal. The term open architecture is part of the enterprise standards that COT is working towards.


Janet Lile appeared before the committee.


Ms. Lile said that Finance and Administration Cabinet groups involved in this study were pleased with the report and support the recommendations. Some of the recommendations align with the IT strategic plan for 2014 to 2018. COT is working towards consolidating IT infrastructure and support for the executive branch and the project is scheduled to be completed in 2015.


In response to a question from Senator Harris, Ms. Lile said that Recommendation 3.1 to allow limited adjustment to eMARS is not currently part of the strategic plan, but COT is working with the Office of the Controller in support of this recommendation.


Walt Gaffield appeared before the committee.


Mr. Gaffield said that the Personnel Cabinet is going to start self entry timekeeping in 2015 with a beta project in the Transportation Cabinet.


In response to a question from Representative DeCesare, Mr. Gaffield said that his office supports the report on the whole. There are no serious disagreements with the report’s findings.


In response to a question from Representative Mills, Mr. Gaffield explained that comparing private and public IT salaries is very complicated. However, his office will cooperate with COT.


Representative King agreed with Representative DeCesare that state government is behind on technology. She cited SAS as a company with expertise to analyze businesses to help agencies work better together. Many agencies could benefit from the ability to share information through technology.


Ms. Lile said that the Cabinet for Health and Family Services contracts with SAS for data services. COT is working internally to develop a data sharing agreement.


Representative King stated that these types of data services are not only beneficial to those receiving benefits but also in terms of discovering fraud and inappropriate usage.


Mr. Gaffield reported that the KHRIS team has formed an organization called SPUG [SAP Public Users’ Group] to communicate with other SAP users nationally and internationally to compare business solutions. Completing the infrastructure consolidation will allow the possibility of doing away with siloing. Consolidation of servers will also be a benefit of consolidation.


Upon motion by Senator Harris and second by Representative DeCesare, the Information Technology In Kentucky State Government report was adopted by a roll call vote.


Lists of topics suggested by legislators for studies to be conducted in 2015 were handed out. Representative King said that topics will be voted on at the next meeting.


The meeting adjourned at 11:50 AM.