What’s In a Name by Cathy Cleek

I admit that Enterprise Data to Revenue (EDR) Project is not exactly a catchy name. But, it’s enormously effective. Why? Because in a few simple words, it sums up the most important tax project that we have ever taken on here at the Franchise Tax Board.  And, in doing so, it helps to define us and our goals over the next several years.

Let’s take a closer look at what EDR means to us.

Enterprise

The EDR Project is our first project that truly impacts all of FTB: the Enterprise.  Many of our staff are fully engaged in EDR work:  on the Taxpayer Folder, correspondence, data handling, system changes, and the list goes on. Remember, we all have something to gain and a stake in EDR.  Our primary goal with the EDR Project is to generate an additional billion dollars a year for our state.  I know $1 billion annually is an aggressive goal, but every day I see how talented our staff and CGI team are.   As we brainstorm new ways of doing work, using data, and using technology, I know our revenue goals are achievable.  As we all know, our state very much needs every dollar of revenue that we can we generate.

Data

Recently, we hit a huge milestone. We successfully implemented Release 1.0 of EDR.  This release allows us to image the entire Personal Income Tax return (vs. three pages).  We also have new streamlined procedures for sorting returns and are using four new faster scanners.

These are exciting changes but what often does not get talked about is the additional data, 43% more, we are scanning and capturing.  Why do I believe that data is so important?

"Consider what happened one spring evening at midnight in 1987:  Seven million American children suddenly disappeared. It was the night of April 15, and the Internal Revenue Service had just changed a rule.  Instead of merely listing the name of each dependent child, tax filers were now required to provide a Social Security Number for each child.  Suddenly, 7 million children—children who had existed only as phantom exemptions on previous year’s 1040 forms—vanished&hellip" Malcolm Gladwell, Freakonomics.

I see the use of data as FTB’s "golden ticket" to:

1.       Turn "red path taxpayers" to "blue path" taxpayers.  Blue path taxpayers file on time, file accurately and pay what is due!

2.       Choose the most productive cases to work.

3.       Do our jobs more efficiently.

With these three outcomes, can you understand why we chose the name EDR?  The Enterprise Data to Revenue project?  Let me share with you some of the results we’ve seen so far by effectively using data.

Payer File.  We’ve added more data to the payer file.  The data is bank information that the taxpayer has used with or reported to FTB or the IRS.  If we know the bank that the taxpayer is using, we can then send an Order to Withhold to that bank and collect amounts due.  In the last year, we’ve collected an additional $44M for the State using new payer data.

FIRM (Financial Institution Records Match).  We are now matching our accounts with an amount due with any bank doing business in California.  Prior to FIRM, we did not have access to the data of every customer in banks doing business in California.  Once we get a match, we can then send an Order to Withhold to that bank and collect the amount due.  In the last six months, we’ve collected an additional $26M using FIRM data.

FE Quality Assurance Workload.  We used data to determine which were the most productive cases in FE and assign them a score.  Now the "under review cases" are prioritized based on highest scores first. So, the cases that the FE team may not get to due to limited resources are those with the lowest scores..   Since implementation, we’ve collected an additional $300k for the State.

Collector Asset Alert.  We implemented this to increase the efficiency of our collectors.  Anytime a new asset is added to ARCS, data is placed on page one of the ARCS case.  Since implementation, we have generated $360k.

And, there is more to come.  This month, our Audit team will use new data in their models used for case selection.  In December, they will also use data from 10 Other State Tax Returns (an Early Initiative) in their case selection efforts.  These efforts are expected to bring in millions of dollars for the State.

Revenue

Data does no good unless we are effectively using data to do our jobs and are open to new ideas and new ways of doing work.  The following data shows that you excel at using data to generate revenue.  Our first year (fiscal year 2011/12) revenue goal for EDR was $65M and you generated $116M!  And, between July and the end of September, you’ve generated $62M.

The following are our revenue goals for the next four years:

• $188M for 12/13
• $280M for 13/14
• $716M for 14/15
• $1.2 B for 15/16

Do you agree that data is powerful?  I hope so.

 

Cathy Cleek serves as Chief Information Officer of the California Franchise Tax Board.