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Oracle GRC Innovation

Oracle GRC Innovation

Pennsylvania Treasury Ensures Integrity of Payments with Oracle GRC Technology

By John Soat


State agency recognized for its innovative approach.

The Commonwealth of Pennsylvania

The Commonwealth of Pennsylvania has modernized its financial-management system and processes, giving the state’s Treasury Department much-improved financial controls and better safeguards against erroneous or fraudulent claims.

Pennsylvania Treasury is four years into an IT overhaul that has modernized many of its processes. With the help of Oracle technology, the agency has implemented cutting-edge financial controls while lowering costs and still maintaining its service levels. Going forward, it’s looking to wring even more control, with the potential for more savings, from its financial-system upgrade.

Pennsylvania State Treasurer Rob McCord

After Pennsylvania State Treasurer Rob McCord took office, he began an extensive technology improvement plan.

Quality and timeliness of service are important to Pennsylvania Treasury. In fiscal 2013, the agency processed 30 million payments, including payroll for government employees, supplier invoices, and tax rebates, worth $75 billion. Many of those payments are time sensitive, needing to be reviewed and processed in less than ten days.

"One of our most important jobs is to review all payments," says Pennsylvania State Treasurer Rob McCord, adding, "You should have high-functioning IT and auditing systems when you are processing 30 million payments!"

More Modern Systems

Pennsylvania Treasury’s technology improvement plan began in 2009 after McCord took office. The department’s 1970s-era mainframe had suffered a meltdown the prior year, threatening the reliability of the department’s processing capabilities. The global financial crisis of 2008 was challenging for all kinds of organizations conducting business, including those in government. Budget dollars were tight, but Pennsylvania Treasury managed to move forward with a migration to a client-server platform.

Pennsylvania State Treasurer building

Pennsylvania Treasury interacts with 60 state agencies, which generate a variety of data formats from more than 25 source systems.

The next step in the agency’s IT upgrade was to modernize its financial system. After an extensive RFP process, Pennsylvania settled on Oracle’s PeopleSoft financial applications with Advanced Controls, which is part of Oracle Governance, Risk, and Compliance (GRC) management tool suite.

GRC refers to a coordinated approach to those three areas of business so they can be managed synergistically, streamlining processes and helping ensure the accuracy of data. GRC technology automates the monitoring, integration, and reporting of these vital functions.

More than a thousand customers use Oracle GRC suite, says Sid Sinha, senior director of Oracle’s GRC product strategy. They include the Centers for Medicare & Medicaid Services, Cisco Systems, and Sherwin-Williams.

Most organizations (53 percent) employ documents, email, and spreadsheets to handle their GRC functions, or they use home-grown reporting systems (17 percent), according to a recent survey of professionals who work in GRC-related roles by OCEG, a market research firm. Oracle GRC replaces those ad hoc methods with enterprise-class capabilities.

Pennsylvania Treasury’s use of Oracle GRC is noteworthy for another reason. The agency uses the toolset for a specific function: to monitor its payment process for erroneous or fraudulent claims. Such monitoring results in annual savings of tens of millions of dollars. Also, Pennsylvania Treasury uses its Oracle GRC technology to identify and intercept improper requests before payments are made, whereas, in most other implementations, "GRC is used as a post-payment system," says PN Narayanan, CIO of Pennsylvania Treasury.

Award for Innovation

Oracle GRC Innovation Award

Pennsylvania Treasury has been able to maintain its service level related to payments with an IT staff that is significantly smaller than it was a few years ago.

Pennsylvania Treasury’s unique, cutting-edge use of the Oracle GRC suite led to the agency being the first to receive the new Oracle GRC Innovation Award, which agency representatives accepted at Oracle OpenWorld 2014 in San Francisco. Pennsylvania Treasury was chosen from a dozen candidates for the award because it was the "furthest along with the technology and stretching it, compared to the others," says Sinha.

Pennsylvania Treasury’s IT environment required Oracle to expand support beyond Oracle GRC’s existing capabilities at the time. That’s because the agency’s client-server environment included Microsoft’s SQL Server database. Supporting a new platform is a long-term investment, Sinha points out, but the agency "convinced us to do it," which has worked out well not only for Pennsylvania Treasury but for Oracle. "Part of what made the decision easy for us," Sinha says, is Oracle’s goal of ensuring the GRC technology "can consume any data in any format."

Here’s why that’s important: Pennsylvania Treasury interacts with 60 state agencies, which generate a variety of data formats from more than 25 source systems.

Prior to Oracle GRC, Pennsylvania Treasury used a payment-monitoring system that included sampling transactions based upon pre-set thresholds as a method to identify errors, says Sinha. With Oracle GRC, the agency is now able to look more closely at every transaction that goes through the system.

Big Data Advantage

Oracle GRC suite is comprised of big data technologies, including some of the newer techniques around using graph technology, says Sinha. The advantage of such technology is the "speed at which we can uncover relationships and structure things where they are related—build relationships very quickly," he adds.

Big data technology can be difficult to use, and often requires specialized talent. Pennsylvania Treasury avoided that additional expense, however, because Oracle GRC is less complex and because the agency’s staff invested the time to be well prepared, says CIO Narayanan.

As a result, Pennsylvania Treasury has been able to maintain its service level related to payments with an IT staff that is significantly smaller than it was a few years ago. In four months the agency has processed around three million payments worth $26 billion in the new system, says Narayanan. Overall, the Oracle project came in on time and under budget, he points out.

Pennsylvania Treasury is looking to expand its use of Oracle GRC—"make it more sophisticated"—by adding to the controls auditors use to examine transactions, says Narayanan. In the initial stage, the system employs six controls to flag potential problem areas, such as duplicate invoices, first-time payments, and resubmission of previously rejected payments. Going forward, the agency aims to increase that number to 25 or more controls. That should up the ante in terms of improper payments blocked, potentially saving taxpayers even more money.

Serving its grass-roots constituency is the mandate of state government. Pennsylvania Treasury is contributing materially to that mission by its use of cost-effective, cutting-edge financial control software.

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