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Centralized Accounting

On September 16, 2009, the State of Indiana implemented a new statewide accounting system which was, among other things, designed to provide a higher level of accountability to Hoosier taxpayers. This web-based system, known as ENCOMPASS (Enterprise Common Processing and Analytics Systems), compiles financial data from all agencies in a more consistent manner, thus increasing the integrity of information statewide. All branches of state government - Executive, Legislative and Judicial - utilize the accounting system, which includes standardized source documents, uniform transaction identification and classification codes, uniform report formats, an account structure with summarization of activity by agency and fund, and centralized control for revenue deposits and warrant issuance. The centralized accounting system is maintained, operated, and under the oversight of the ENCOMPASS team, which includes representatives from the Auditor of State, State Budget Agency (SBA), Indiana Office of Technology, and State Board of Accounts.

The inherent efficiencies of this integrated accounting software system have allowed the State Budget Agency to offer consolidated, centralized accounting services to a host of smaller agencies, helping to ensure that these agencies are able to recognize cost savings related to those efficiencies and conform to overall ENCOMPASS-compliant business practices.  Before conversion to the new financial software, many small agencies had to maintain a full array of accounting staff, regardless of the number of financial transactions they conducted.  In most cases, one or two staff members were required to maintain a level of technical proficiency in a wide variety of processes and procedures for a relatively small number of transactions. In addition, the state did not have a core group of experienced and knowledgeable individuals who had extensive experience in the daily use of PeopleSoft that could provide assistance to other agencies.  

Agencies utilizing SBA’s centralized accounting staff are charged a fee based on the number of transactions conducted by those agencies. The fees charged to each agency are significantly less than the cost of maintaining the necessary staff, computers, training, etc., that would be necessary to conduct these transactions on their own with dedicated internal resources.

To date, SBA’s centralized accounting staff perform accounting functions for the following agencies: Indiana Criminal Justice Institute, State Student Assistance Commission of Indiana, Indiana War Memorials Commission, Office of the Inspector General, Department of Local Government Finance, Indiana Board of Tax Review, Indiana Education Employment Relations Board, Office of Faith-Based and Community Initiatives, Office of Federal Grants and Procurement, Indiana Civil Rights Commission, State Board of Animal Health, and the State Budget Agency/Office of Management and Budget.

As a result, ten full-time positions were subsequently not filled in the consolidated agencies, saving taxpayers approximately $530,000 in salaries and benefits annually. In addition, in many cases, invoices are being paid more timely and federal dollars are being leveraged more efficiently as a result of the level of attention and specialization that a centralized and full-time accounting staff affords to smaller agencies. Also, because SBA accounting staff is cross trained in several aspects of the accounting system, consolidated agencies do not have to worry about succession planning, vacations, or time lost to illness among accounting staff. SBA staff can adequately cover a multitude of contingencies to ensure that the agencies’ business is conducted on time and within performance expectations of the state, the agencies, and their constituents.

Updated 5/24/11