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Administration seeks $26M first‑year ERP investment, flags reappropriation and debt transfers
Summary
Secretary Adam Proffitt and Legislative Research staff briefed the committee on reappropriations lapsed by the LBC, Docking building costs, a repeated mail‑scanning request and a multiyear ERP modernization estimated at $90–100 million with a $26 million first‑year ask.
The Department of Administration presented its budgetary overview and outlined a request to begin a multiyear modernization of the state’s enterprise resource planning (ERP) systems, as well as several reappropriation requests and debt‑service management proposals.
Why it matters: the Department of Administration provides core shared services—accounting, payroll, facilities, procurement and debt management—that affect every state agency. An ERP modernization and debt‑service reorganization would affect accounting, HR, payroll and statewide reporting.
Legislative Research walked the committee through the Department’s FY 2025 revised estimate and FY 2026 request. Among items discussed:
- Reappropriations lapsed by the Legislative Budget Committee: the department asked to reinstate several reappropriations lapsed by the LBC, including about $7 million for a centralized licensure verification system required under Senate Bill 66. Legislative Research said OITS and agencies are still implementing those projects and some obligations have already been encumbered.
- Mail scanning facility: the department repeated a $400,000 mail‑scanning ("veil scanning") request that had been approved previously but lapsed because reappropriation language was not included. Secretary Proffitt said the facility is now built and operating and he requested the funding to cover the cost.
- Docking State Office Building: Legislative Research presented a project schedule showing total project cost near $139 million and said construction would complete in spring (April/May) with an anticipated opening in May.
- Debt service transfer: the administration recommended transferring approximately $10.3 million in debt‑service payments to the Department of Administration’s budget. Roughly $7 million of that authority would be lapsed from other agencies and consolidated in Department of Administration for centralized debt management.
- ERP modernization: Secretary Adam Proffitt outlined a multiyear, cross‑agency ERP modernization to replace aging on‑premises systems for finance (SMART), HR (SHARP) and the IBARS budget system. The department’s preliminary estimate places a typical modernization in the $90–100 million range, with a $26 million year‑one request and an expected implementation window of three to five years. Proffitt said the ongoing annual cost after implementation would likely be in the $6–9 million range and that the Department consulted Gartner and a cross‑agency work group to evaluate options. "We support a fully integrated cloud‑based solution," Proffitt said, adding that earlier adoption would avoid last‑minute vendor and consultant scarcities.
Proffitt also summarized the department’s role in managing statewide debt and central services. He asked for some reappropriated items to be restored because the department has already encumbered or spent portions of those funds and because some appropriations fund agencies that shifting them to the Department of Administration better centralizes debt management.
Committee members asked about oversight and potential proviso language; Representative Hubert suggested referral/opening to appropriations for deeper review when the bill drafting and fiscal language are available. No final committee vote was taken on the ERP request at this meeting; members asked staff for additional information and timeline detail.
