Attention to detail keeps R.I. tech projects on track

BRASS TAX: The R.I. Division of Taxation’s new imaging machine operated by state Tax Administrator David Sullivan, right, and Daniel Clemence, the division’s chief revenue agent and head of e-government efforts. / PBN PHOTO/MICHAEL PERSSON
BRASS TAX: The R.I. Division of Taxation’s new imaging machine operated by state Tax Administrator David Sullivan, right, and Daniel Clemence, the division’s chief revenue agent and head of e-government efforts. / PBN PHOTO/MICHAEL PERSSON

Two monumental technology projects are in motion in Rhode Island. The most well-known one is HealthSource RI, the state’s health-benefits exchange that went online Oct. 1.
The less visible, but no less complex project is the R.I. Division of Taxation’s five-year, $25 million project, which began in May, to implement a new agency-wide computer system.
So far, so good for both.
The projects are going smoothly, with no real outages and no major issues, said R.I. Chief Digital Officer Thomas Guertin, who oversees the Office of Digital Excellence and serves as project director on major projects to integrate technology into state government.
To put it simply, Rhode Island is having none of the fiasco that happened with the Oct. 1 launch of the federal health care portal www.healthcare.gov, when millions of citizens tried to get online and the system had problems too massive to be called glitches.
“No one in the government made sure the many complex parts of the federal-health insurance website worked together properly, and testing of the complete site didn’t take place until two weeks before its Oct. 1 launch, contractors said at the first congressional hearings into the matter,” the Wall Street Journal reported on Oct. 25.
“That’s why projects of this scope are done in phases,” said Guertin. “We’ve had a successful implementation of our state health exchange, and we have two more releases, or phases, of that project.”
Both HealthSource RI.com and the Division of Taxation project called STAARS, which stands for State Tax Administration And Revenue, have individual daily project managers who report to Guertin.
“On a daily basis, we definitely feel there’s central project oversight and project management,” said Guertin,
While Rhode Island’s projects are small in comparison to having millions of Americans go online for health insurance, the Ocean State is, nevertheless, tackling some substantial tech territory and the STAARS project offers a good view into the required pacing and methodical approach for large-scale endeavors. STAARS is being done in three phases, with the main public taxpayer portal not even due to be rolled out until phase three, planned for October 2015 to September 2016, said Guertin.
The Division of Taxation entered into a $23 million contract with Revenue Solutions Inc. of Pembroke, Mass, effective May 1, that covers software, hardware and related implementation, maintenance and support services, including new versions of software during the contract period.
The request for proposals was very specific and after the contract was awarded, a detailed examination of the agreement took place with Revenue Solutions and the Division of Taxation.
“For the first two months, we went over the 700 specific functional requirements that the system will do,” said R.I. Tax Administrator David M. Sullivan. “We reviewed with the contractor what our requirements are and their interpretation of the requirements. We made sure we all agreed on the specifics before we signed off on it.”
In addition to corporate and individual income taxes, the Division of Taxation handles a myriad of other taxes and fees, ranging from sales tax to hospital licensing fees and decals for truckers.
“We handle 56 different taxes and fees,” said Sullivan. “We receive 2.1 million returns a year – that’s tax returns and all types of applications for fees.”
A major improvement to come with the new system will be the integration of databases used by the Division of Taxation.
“Right now we manage our taxes through 80 separate databases and none of them speak to each other,” said Sullivan. “This system will integrate it into one modernized platform.”
The first phase of the system will be the conversion of 36 tax types and fees from varied offline systems. The second and third phases will update and integrate different types of taxes.
The new system isn’t expected to create the need to add or lay off employees, although some tasks, including such upgrades as the ability to scan extensive amounts of information directly into the system, will mean a redistribution of some staff, Sullivan said. “In my opinion, it’s been long overdue for both the business and individual taxpaying community that the Division of Taxation make tax administration more efficient, tax-friendly and easier to use,” said David Morganelli, a CPA, and tax and corporate partner at the Providence law firm of Partridge Snow & Hahn LLP.
“There are a myriad of other states that have undertaken the same capital investment in their computer system,” said Morganelli. “Given the current state of technology across the country with respect to tax administration, it’s almost a requisite for any state.”
The new system will benefit taxpayers and tax preparers, he said.
“You’ll be able to get immediate answers to tax questions by using technology,” Morganelli said. “It will make the dissemination of rulings and regulations, tax laws and procedural issues easier to access.”
The efficiency of the new system means anticipated cost savings for the state and the likelihood of increased collections, said Patricia Thompson, a CPA and a tax partner at accounting firm Piccerelli, Gilstein and Co. LLP in Providence.
For instance, the Division of Taxation and businesses will be able to know about current sales tax obligations.
Individuals and businesses will benefit from the information that will be coordinated and accessible, she said.
“On payroll withholding, for example, that information will be easier to access,” said Thompson.
“I’m anticipating businesses will be able to do more things online,” she said. “I think it’s a streamlining process and streamlining for business is always good.”
The $23 million contract with Revenue Solutions leaves a buffer in the $25 million awarded by the state legislature for the tax-system modernization. The remaining funds may be used for related improvements, such as PCs, said Sullivan.
But in addition to the details of the upgrade, Sullivan said there are two clear, overarching guidelines: “We will remain on time and at or under budget.” •

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