ABCs of the BCAs

February 2020

FI$Cal Support Team

Note: STO’s boards, commissions and authorities were successfully added to FI$Cal in 2018.

Back row (left to right): Jimmy Tran (STO Support), Jamel Bounar (STO Support), Nuo Li (STO Support), Nitish Mishra (STO Consultant), Yassar Dahbour (STO Support), Loan Lee (STO Support), Brittney Trost (STO Support), Xochilt Becerra (STO Executive Office), Rita Clark (STO Executive Office). Front row (left to right): Genevieve Jopanda (STO Chief of Staff), Neeraj Chauhan (FI$Cal Chief Deputy Director), Shela Tobias-Daniel (STO/FI$Cal Partner Business Executive), Andre Rivera (STO Steering Committee Member), State Treasurer Fiona Ma, Miriam Barcellona Ingenito (FI$Cal Director) Not pictured is Thuy Troung (STO Support).

The Financial Information System for California, or FI$Cal as it is known, is the largest single integrated financial system in the public sector. Unprecedented in its scope and complexity, FI$Cal integrates state government processes in the areas of budgeting, accounting, cash management, and procurement. Its ultimate goal is to consolidate the state’s financial systems into a common platform and eliminate thousands of aging and decentralized legacy systems and applications.

The FI$Cal support team in the State Treasurer’s Office is housed within the Centralized Treasury and Securities Management Division (CTSMD) and it serves the entire office, including the 16 boards, commissions, and authorities overseen by Treasurer Ma.

In 2005, the Department of Finance (DOF) began a project called the Budget Information System (BIS). BIS aimed to meet DOF’s budget development and administrative needs. Shortly after starting that project, however, the focus shifted to modernizing and replacing the state’s entire financial management infrastructure. The California Department of Technology (CDT), which provides oversight of state technology projects, requires Special Project Reports (SPR). The first SPR renamed the project “FI$Cal”, extended the schedule, and increased the scope of the project.

In addition to scope, schedule, and cost, an SPR also notes when a deviation would require additional SPRs. There have been numerous changes to the project; it is now operating under its eighth SPR.

During the first year of the project state officials realized they needed the support and partnership of state entities that control government financial processes. That partnership, memorialized in a Memorandum of Understanding, brought together DOF (the project sponsor), the State Treasurer’s Office (STO), State Controller (SCO), and the Department of General Services (DGS) in order to guide the project and serve as its Steering Committee.

Each partner provided business and information technology expertise to the project. Their responsibilities included defining business requirements, aiding in the building and testing of system functionality, acting as liaisons between the project and partnering agency staffs to ensure all business and technical requirements are met, and providing on-going maintenance support to the project and end users.

After continued planning and a lengthy procurement process, in 2012 the state contracted with Accenture to customize existing off–the–shelf software, PeopleSoft, to address the state’s financial management needs.

In 2016, state law created the Department of FI$Cal to maintain and operate the system and support its users. The department will assume full responsibility for the system once it is accepted by the state, which is now slated for July 2022 if all requirements are met.

Functionality Implemented to Date

2015

FI$Cal project integrates the state’s procurement processes into the FI$Cal system, launching Cal eProcure. DOF prepares Governor Edmund Gerald Brown Jr.’s proposed budget for the first time using Hyperion in the FI$Cal system; and the STO Administration Division went live with their accounting and procurement processes.

2016

STO Administration Division successfully closes their accounting books using FI$Cal for FY 2016-2017.

2017

STO successfully implements functionality in FI$Cal that requires all departments to report whether or not they have any bank accounts outside the Centralized Treasury. This was a manual process prior to FI$Cal.

2018

Centralized Treasury and Securities Management Division successfully implements its cash management functionality statewide. $2 trillion in banking transactions are now accounted for in FI$Cal. STO’s boards, commissions, and authorities are successfully added to FI$Cal, and the project launches the pilot for its financial transparency website called “Open FI$Cal”.

2019

FI$Cal adds to Open FI$Cal nonconfidential expenditure data from state departments using the system. STO’s Administration Division successfully closes the STO’s boards, commissions, and authorities accounting books for FY 2018-2019.

Today, there are 152 departments using the FI$Cal system with about 18,000 users supported by 244 state employees.The number of departments using the system represents a significant percentage of all state government departments, including those handling the majority of state expenditures.

In August of 2019 Special Project Report 8 was issued, resetting the overall scope of the project to only include the minimal viable functionality needed by the SCO for FI$Cal to become the statewide book of record on the state’s financial activities. SPR 8 also extended the completion schedule by one year to a projected end date of July 2020. The project cost increased by $144,901,954 and the total cost of the project now stands at $1,063,071,368.

Should the SPR 8 scope be changed in the future and increase by more than 10% what is planned, or should the schedule slip by 90 days or costs increase by more than $13 million, FI$Cal will be required to submit another SPR.

Meanwhile, in order for FI$Cal to become the state’s book of record, the State Controller’s Office must be able to use FI$Cal data to produce the Budgetary/Legal Basis Annual Report (BLBAR) and the Comprehensive Annual Financial Report (CAFR). The current goal is to deliver minimal viable functionality by July 2020, and then compare FI$Cal to SCO’s legacy systems for one year (2020-2021) to ensure the two systems match. By FY 2022 the SCO is expected to produce the BLBAR and CAFR using only FI$Cal.

As for the State Treasurer’s Office, we have already successfully implemented our control functionality. Any remaining functionality that would affect the STO, such as bond, loan, investment, and Pooled Money Investment Account (PMIA) functionality, would only require that STO provide data.

FI$Cal has certainly experienced growing pains during a challenging transition period. However, working together we continue to work through each new challenge. The FI$Cal team within the State Treasurer’s Office is a knowledgeable and dedicated group and committed to this critically important project’s overall success.

Note: Each month we will be sharing information on one of our BCAs and explain how the programs behind the acronym are enhancing the lives of Californians all across the state -- and how you, your family, or your business can share in, and contribute to, California's prosperity

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CAEATFA News

New Sales Tax Exclusions Awarded to Cutting-Edge Companies

The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) is off to a great start in supporting innovative companies that save energy, reduce pollution, and cut the emissions of greenhouse gases, while retaining and often adding jobs.

At its meeting on January 21, CAEATFA awarded $20 million in sales tax benefits to six different applicants, including $10 million to AltAir Paramount LLC, the only commercial producer of renewable jet fuel in the world.

The Los Angeles County-based company plans to purchase $119 million of equipment to upgrade and expand the facilities it uses to turn non-food grade vegetable oils and beef fat into renewable diesel and jet fuel. The effort supports 136 production-related jobs, 450 construction jobs and will prevent the emission of 2.3 million metric tons of CO2 each year.

AltAir supplies fuel to United Airlines, Boeing, UPS, KLM airlines and many other companies.

Best Express Foods Inc., located in Stockton, received a sales tax exclusion of up to $465,000 on the purchase of $5.5 million in equipment, including production equipment, a walk-in cooler, and solar panels. The new equipment will support 58 jobs and help reduce energy consumption and solid waste.

East Valley Water District was awarded a $5 million sales tax exclusion to convert raw wastewater and food waste into biogas at the Sterling Natural Resource Center plant near Highland in San Bernardino County. The biogas will be converted into electricity to support facility operations and sold to Southern California Edison.

Three applicants working to turn methane produced by dairy cows into biogas also received awards.

• Merced Pipeline LLC received a $2.6 million state sales tax exclusion for the purchase of equipment to build covered lagoon digester systems at 11 neighboring dairies and a centralized biogas conditioning facility. Gas captured at the dairies will be turned into renewable natural gas at the centralized facility for use as transportation fuel.
• Five Points Pipeline LLC was awarded a $1.25 million state sales tax exclusion to build dairy digesters in Fresno County that will capture biogas from five neighboring dairy farms and a centralized biogas conditioning facility that will produce renewable natural gas from the captured biogas and inject it into the PG&E natural gas pipeline for use as transportation fuel.
• Aemetis Biogas LLC received a $733,000 state sales tax exclusion for the purchase of equipment to build a new dairy digester cluster and a centralized conditioning facility in parts of Stanislaus and Merced Counties. The dairy biogas will be collected and cleaned to produce renewable natural gas to be sold as transportation fuel at an on-site fueling station.