[October 22, 2008] State to outsource accounting: Skill-intensive OAKS project needs outside help, study says Tweet Oct 22, 2008 (The Columbus Dispatch - McClatchy-Tribune Information Services via COMTEX) -- The Strickland administration wants to turn over a big chunk of the state's sophisticated accounting, payroll and management system -- including dozens of high-paying technical jobs -- to a private contractor. The Ohio Department of Administrative Services, the business arm of state government, is seeking bids for a managed-services contract to handle part of the Ohio Administrative Knowledge System. OAKS is a $158 million, multiagency network that administers payroll, personnel and other state government functions. The proposed multimillion-dollar contract would cover work that would have been done by roughly 35 OAKS employees, most of them technical jobs with a salary range of $100,000 to $125,000, agency spokesman Ron Sylvester said. The state has been unable to fill the jobs largely because they require expertise with PeopleSoft, a technical software program that is the heart of OAKS. PeopleSoft also is used by many major Ohio companies, including AEP, Nationwide, Limited Brands and Blue Cross/Blue Shield. The high demand creates keen competition for skilled employees to fill the jobs. An assessment done for the state by Top5 Inc., a consulting firm from California's Silicon Valley, concluded that OAKS now "is not able to effectively support the current and future business needs of the state." More significant, the consultant found that half of the current OAKS workers "do not possess the requisite technical skill set to successfully perform in the roles for which they were hired." About 75 percent of the OAKS organization is "high risk...either due to staffing gaps or skill set deficiencies," Top5 reported. Only one candidate was considered for most of the 65 positions filled thus far, the consultant found. To cope with those deficiencies, a managed-services contract "is a cost-effective and expedient way to realize the vision of OAKS," the consultant said. Sylvester said, "Unfortunately, the OAKS we have today was designed yesterday and will not necessarily meet the needs of tomorrow." The new alignment would have only 29 state employees working on OAKS, resulting in the reassignment of 36 current state employees. Sylvester said layoffs are not expected. State officials said they could not provide an estimate for the new contract because the request for bids went out only two weeks ago. About $132.5 million of the OAKS project's total $158 million estimated cost has been spent thus far. Sylvester said Gov. Ted Strickland approved the contract plan even though "he's not a fan of outsourcing." The contract will have a five-year term, leaving open the possibility that state employees could take over the jobs when it expires, Sylvester said. Most of the OAKS jobs at risk of being lost are covered by the Ohio Civil Service Employees Association, the union representing the majority of state workers. Union officials received an in-person, hurriedly planned visit from Administrative Services Director Hugh Quill on Sept. 30. The next day, the union's executive director, Andy Douglas, sent out a memo concerning the meeting. Douglas said in the memo that the Strickland administration almost certainly violated the union contract by failing to provide written notice at least 120 days in advance of submitting a proposal that would result in contracting out-of-state jobs. However, the union appears willing, as Douglas put it, to avoid "standing in the way of what the administration wants" on OAKS. Instead, the union is pushing for a joint agreement with the Strickland administration giving it a voice on a transition team working with the new contractor and the state. The OAKS project has a rocky seven-year history. Conceived in 2000 during former Gov. Bob Taft's administration, it was shelved for months because of a lack of money. It got back on track in 2005, eventually taking over the state payroll and other accounting functions. OAKS soon will tackle the procurement process for state goods and services. State officials say that could save taxpayers $200 million annually in improved efficiencies. OAKS suffered a setback in June 2007 when a backup tape containing payroll and accounting data from 1.3 million individuals, businesses and other entities was stolen from the car of an intern who had been assigned to take it home for safekeeping. That set off a flurry of activity related to computer security and privacy. The state subsequently spent nearly $934,000 on software to encrypt sensitive data on 70,000 state laptops, personal computers and other devices; $850,000 on a service to track state laptops and other computers; and nearly $2.2 million to provide identity-theft monitoring for those affected. There was never any evidence the stolen data was used. Dispatch reporter Mark Niquette contributed to this story. [email protected] To see more of The Columbus Dispatch, or to subscribe to the newspaper, go to http://www.columbusdispatch.com. Copyright (c) 2008, The Columbus Dispatch, Ohio Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]