State of Colorado Department of Revenue

Accounting Information Systems

ACCT 4540/5540

Improving Efficiency of the

State of Colorado Department of Revenue

Final Deliverable

Contact Information

Team Contact Information:

Adam Pasha

Project Manager

303-907-8655

Josh Pak

Implementation Consultant

720-635-4881

Max Sarlo

Scorecard Analyst

303-359-5868

Tim Millea

Training Industry Knowledge Leader

630-220-5148

Client Contact Information:

Tammy L. Sorensen

Senior Revenue Agent

State of Colorado Department of Revenue

970-494-0932

Professor Contact Information:

James Marlatt

Accounting Information Systems Professor

University of Colorado at Boulder

720-933-5541

Table of Contents

How Final Deliverable Differs…………………………………………………...…..….5

Project Purpose…………………………………………………………………………..6

Objectives……………………………………………………………...……………....…6

Project In-Scope……………………………………………………...………………….8

Project Out-of-Scope………………………………………………………………….…9

Deliverables………………………………………………………………………….…...9

Project Manager Authority……………………………………………………………..9

Work Breakdown Structure………………………………………………………...…10

Project Schedule………………………………………………………………………...15

Assumptions…………………………………………………………………………….17

Project Cost Analysis…………………………………………………………………..18

Identifying Project Risks………………………………………………………………20

Stakeholder Analysis…………………………………………………………………...25

Project Quality………………………………………………………………………….27

Project Change Management……………………………………………………….…27

Project Closing……………………………………………………………………….…28

Bibliography…………………………………………………………………………….29

Status Reports……………………………………………………………………..……31

Meeting Minutes……………………………………………………………………...…31

Risk Management Updates………………………………………………………….…43

Quality Assurance………………………………………………………………………43

Lessons Learned……………………………………………………………………...…43

Peer Evaluations………………………………………………………………………...43

Appendix

Slideshow Presentation

Research

First Draft

How Final Deliverable Differs

This project has been a series of tests, hardships, and rewards every step of the way. Along each internal or external due-date, we as a team had to respond to changes and were constantly updating and revising our project. This was no truer for us when we turned in our ‘First Deliverable’ and received Professor Jim Marlatt’s responses back. While he believed we were on the right track and had done a lot of good work, he directed us in a few ways and gave some ideas of how to focus our attention better. With that said, we followed his recommendations, as well as the feedback we got from Statera and implemented the following changes from our ‘First Deliverable’ to our ‘Final Deliverable:’

• Most importantly, we narrowed down our paper and our topic, and completely focused on Yellow Book Audit Standards. In our ‘First Deliverable,’ introducing Yellow Book accounted for 1/3 of the changes we sought to bring to the Department. The other three changes included an increase of basic training and how training is done, as well as establishing a generalized Balanced Scorecard that would score, rate, and rank all employees based off of their every day jobs. We focused in on Yellow Book Audit Standards as they were the most realistic of changes, the standards could bring the biggest benefits to the Department, and the adoption of the standards offered a more detailed plan that we could write up and give to Tammy. This change completely effected every sub-heading and idea in our paper; however, by focusing in on this stronger topic we were able to make our paper and our presentation much stronger.
• Based off of our communications with Statera, we scaled down the timeline for our proposal from two years to one. We agreed with Statera that two years was too long of a project timeline and that adoption and employee buy-in could be difficult for such a long plan.
• We switched a general Balanced Scorecard to a Balanced Scorecard that would rate employees on their adherence and knowledge of Yellow Book.
• Our plans in dealing with possible change reluctance became much more informal for our ‘Final Deliverable’ than it was in our ‘First Deliverable.’ Our first plans called for having surveys and emails sent continuously in a very structured, formal setting. It completely ignored the fact that concerns and comments from crowds are often very sensitive issues and are preferred to be handled in more sensitive methods. As such, we have developed a few methods that keep the complainer’s identity anonymous.

Again, these changes to our project brought more work and thought to the project, but have definitely added to make the paper and the presentation stronger.

Project Purpose

The purpose of our project is to increase efficiency and motivation amongst the auditors to ensure more accurate work that leads way to full tax revenue recognition. We plan on achieving this goal by persuading the Department of Revenue to adopt a standardized audit methodology, as well as setting a schedule for training and implementation, and incorporating a system to measure performance and progress of the utilization of the new methodology.

Objectives

To accomplish our ultimate objective of recognizing full tax revenue, we have set multiple “small picture” objectives that will path the way. The “small picture” objectives include recommending and persuading the Department of Revenue to adopt the standardized audit methodology known as Generally Accepted Government Auditing Standards (GAGAS), more commonly known as Yellow Book. With respect to Yellow Book our timetable specific objectives include the following:

• Communicate to the Department the positives of adopting Yellow Book Standards in a comprehensive, detailed manner.
• Establish schedule for adoption and training.
• Schedule to set up an in-depth training plan includes the following:
• The Department should first look internally for a knowledgeable leader in GAGAS who can teach the rest of the Department the audit methodology. If the Department deems there is no one suitable, the Department should look for an external consultant that will be compensated to produce lectures on GAGAS that will be filmed and posted on the Department’s intranet site.
• Within the first three months of 2010, have the internal or external “Yellow Book Expert” film detailed lectures covering all sections of the Yellow Book.
• Use the video from the lectures and have IT or if necessary external IT consultants to post the video on the Department’s intranet site. This will be a one-time monetary cost, as the lecture material will be used until it becomes outdated (Note: Yellow Book has not gone through any drastic changes since 1999). This process will be a slow and gradual transition that does not look to overwhelm everyone. Preliminary goal is to have ½ of the Yellow Book lecture material implemented into the system and easily accessed by any and all employees on May 1st, 2010.
• In addition to posting the training videos on-line, IT will have a discussion link as well as a link for mandated quizzes for the Department to use. The discussion link will be used for auditors to ask other auditors questions and allow for a more open, relaxed environment which perfectly fits in with the Department’s culture. This too will allow auditors to not bother or utilize their senior’s time with regards to questions. The quiz link will be used for when the Department mandates their auditors to take quizzes upon completion of a lesson.
• Schedule for adoption of Yellow Book Standards:
• For all employees, the Department will require two-week training in Yellow Book Standards in May of 2010. Those employees will access the training videos on-line and be forced to take quizzes.
• In the summer of 2010, the Department will send one Senior at a time to a Wyoming state audit where Yellow Book standards are currently being followed. This will give Seniors and above a great real world feel for how the standards are utilized.
• Test employees on Yellow Book standards in the late summer/early fall of 2010 to ensure that the Department and its employees can handle properly and effectively, tax audits using the Yellow Book Standards.
• For all employees, the Department will require a second training session that will last one-week in July of 2010. Those employees will access the training videos on-line and be forced to take quizzes.
• By the beginning of the 3rd Quarter of 2010, the Department will fully adopt Yellow Book Standards as well as adhere to its requirements. Those requirements being following the exact rules and methodology that the Yellow Book calls for on all occasions, as well as meeting the 80 hour training requirement for every two years for every auditor with at least 20 hours of training per year.
• Institute a quarterly training for first two years of Yellow Book implementation for all employees to ensure the subject resonates with them.
• Institute a training annually thereafter to update all employees on any changes or additions to Yellow Book Standards.
• Implement internal performance audits on auditors to gauge the effectiveness and results of adherence to Yellow Book standards
• Establish a Balanced Scorecard (BSC) that evaluates the specific employee’s adoption and usage of Yellow Book standards. Specific ideas that they will be graded and ranked upon include the following: he/she’s knowledge and understanding of the standards (as seen by quiz results and feedback from Senior) as well as the ability to teach them to fellow auditors on the job. The latter notion will be most important for Seniors as they will be primarily teaching their subordinates the majority of the time.
• The BSC will be used for the Department to see what needs to occur to make the Yellow Book adoption more efficient and effective, as well as be a basis that determinesraises at the Department, and as an influential factor to promotions in May of 2010.
• Implement the following system which shows the relation of scores on the Balanced Scorecards to amount of raise received:

• If the BSC idea works and is well utilized with respect to Yellow Book adoption, the Department may want to in the future adopt a generalized, complete picture BSC that grades and ranks each employee based on all aspects of their job.

• With regards to easing the progression of adoption of Yellow Book standards, it will be important to maintain constant communication and have the Seniors really push for feedback and comments from their subordinates. In addition, at the end of each of audit, each auditor will be required to have a formal sit down with their Senior where they can voice their comments, suggestions, recommendations, and complaints regarding how the audit went and what he/she had a difficult time on.

Project In-Scope

With our objectives in mind, as well as being aware of resources, it is important that we define what is “in-scope” and “out-of-scope” of our project. Items in both lists are very important to us, and would be very beneficial to the Department, but due to various constraints our project will only focus on those that are “in scope.” Again, they will be defined in the four categories we plan to target through our changes.

Project In-Scope includes:

• Instituting schedules to guide timetable on the following:
• Setting up websites with training videos posted on them.
• Setting up time in everyone schedules to train (block it out in advance).
• Setting up quizzes that are indicative of the lessons learned in training, and that are the determining factor of an employee “passing” a training session or not.
• Identifying the essentials needed for someone from the Government Accounting Standards Board (GASB) or someone internal who is knowledgeable and certified to teach, be the trainer with regards to both in-house trainings, and the video trainings.
• Institute Yellow Book standards to company and establish timetable for when each position needs to be proficient with standards in real world audits.
• Establish and define important criteria that are integral to the efficiency and success of Yellow Book adoption by way of a tailored BSC and have each criterion weighted for its importance on the final score of the BSC.

Project Out-of-Scope:

Items and ideas that are potentially important to the success of our project but are not necessarily goals or a possibility for our team are the following:

• Providing external factors for employees to utilize in learning and adopting Yellow Book Standards.
• Setting up a hot-site to mitigate the risk of the internal site crashing.
• Analyzing and/or challenging specific proclamations from the Yellow Book itself.

Deliverables

• Analysis of what is to be expected with adopting Yellow Book Standards; including monetary costs, time related costs,and tangible and intangible benefits, and real world evidence of an increase in production and efficiency directly related to adoption.
• Precise plan for how training will occur and be implemented within the Department.
• Balanced Scorecard that gauges employees on criteria that is believed to be important for a successful adoption and utilization of Yellow Book Standards (SeeAppendix A).
• The introduction of a Balanced Scorecard that gauges employees on all aspects of their jobs (See Appendix B).
• A sample of a quiz that would be given to entry level revenue agents after taking one of the training sessions that will be required (See Appendix C).
• An informative card that can be handed out to all employees that generally defines what Yellow Book is (See Appendix D).

Project Manager Authority:

As Project Manager, Adam Pasha has the authority to do the following:

• Determine the project approach, including milestones; deliverables; and scope.
• Determine which of our objectives is of highest priority.
• Determine from our scope, what is “in” and “out” of scope.
• Identify and recruit project team.
• Determine project resource requirements, including funding, people and equipment.
• Determine how to allocate/reallocate project resources throughout the project.
• Fire project team members if any problem that cannot be fixed arises.
• Identify and communicate directly with all project stakeholders as the project manager sees fit.
• Determine which recommendations to implement if the project sponsor/project stakeholders do not provide this feedback within three business days of it being requested.
• Ensure team meets overall goal of project by the deadline.

Work Breakdown Structure (WBS)

While Myers Briggs is a very useful toolthat can be used to understand how one works with and relates to others, for the purposes of our project and team formation we found it more beneficial to use another method for team formation. On the day teams were formed in class, Adam Pasha, the Project Manager, asked each prospective member what their end personal goal was with this project, and how much work he or she was willing to put into the project. The project manager and the members that joined all answered those questions in a very similar form, and thus it was a perfect fit from the start. The end personal goal for all the members was to learn a lot, get real world business experience, and achieve the highest grade for the team. With regards to work loads, the team members all agreed that they were willing to put in as much time and energy as possible. With that, the team was formed and we have not looked back since.

Once our team was formed and we had our project idea down, it was important for us to identify the unique skills specific to the project and to the subject matter that would be needed to produce a high-quality finished product. With that in mind, we identified our one main goal of successful Yellow Book adoption into four sub-sections. Those sub-sections include training, audit methodology, balanced scorecards and change management. Once those were established, we discussed as a team who would be best suited for each objective. In completing the ‘Skills Matrix’ (shown below) we were able to decide who would work on what, and who would help out others on what. With that said, it was determined that Tim would work on attaining our objectives with regards to training, Adam would work on attaining our objectives with regards to audit methodology, Max would work on attaining our objectives with regards to promotions and raises, and Josh would work on attaining our objectives with regards to change management.

The ‘Skills Matrix’ set us each off in our own direction initially, as we used it to have us each emphasize on a specific objective. Before we could go off in our initial directions however, we decided it best to develop a plan that would agree to the ‘Skills Matrix’ as well as the time available for each member. With that in mind, we formed a ‘Project Team Organization Chart’ that would be used to help define the work every individual would do, as well as influence how we would set up our ‘Work Breakdown Structure’ and ‘Project Schedule.’ Below is our ‘Project Team Organization Chart:’

Project Team Organization Chart