Increasing revenues, transparency and taxpayer service through benefits-funded modernization

How CGI helped California generate $498 million in increased revenue (as of September 30, 2013), with total revenue increases of $2.8 billion projected by 2016-2017.

The challenge
The State of California’s annual estimated tax gap – the difference between what taxpayers owe and what they voluntarily pay − is estimated to be nearly $10 billion. To help offset this deficit, the California Franchise Tax Board (FTB) undertook a number of initiatives to increase voluntary compliance, identify taxpayers not filing correct amounts, and pursue outstanding debt. Yet, those efforts were constrained by outdated and redundant systems, disparate data, and inefficient processes. To alleviate these problems, FTB defined a clear strategy to improve tax administration and program delivery by moving to a fully integrated enterprise organization. The cornerstone of their vision is the Enterprise Data-to-Revenue (EDR) project.

The solution
The State chose CGI to deliver the EDR solution based on a number of key factors, including the company’s ability to deliver complex solutions for FTB and other government tax clients, as well as CGI’s strong local presence, deep California government expertise, and proven benefits-funded approach. CGI’s innovative solution supports FTB’s fundamental process changes by:

• Modernizing legacy systems with a service oriented architecture (SOA)
• Delivering a new returns processing system that automates manual processes, improves data capture and validation, and processes individual and business taxes through a single technology architecture
• Making all data accessible to legacy systems and FTB users through an enterprise data warehouse, and using enterprise data modeling to improve collection and audit activities and reduce noncompliance
• Providing a secure, online Taxpayer Folder that gives FTB staff, taxpayers, and other authorized users access to information (such as tax returns, payments, correspondence, etc.) for a comprehensive view of the taxpayer, increasing taxpayer awareness and promoting better self-service and self-compliance
• Capturing significantly more tax data from all channels (e.g., tax forms, correspondence) while decreasing the number of documents requiring manual intervention.

Early wins and a 100% benefits-funded approach
As of September 30, 2013, the EDR project has already generated $498 million in additional state revenue, more double the original projection for this point. When completed, EDR’s benefits are estimated at $1 billion annually. EDR is deliberately structured to pay for project costs from a percentage of increased collections each year. Under the performance-based, benefits-funded contract, no monies are paid to CGI until revenue is generated.

Key technologies and methods
EDR’s mission-critical, highly available technology is an industry-leading platform designed to expand the use of data and significantly improve tax return processing, resulting in better service to taxpayers.  Key components of the solution include:

• Service oriented architecture (SOA) allows reuse of processes and technology components across FTB business functions. SOA enforces technology standards compliance, protecting investments and allowing FTB to seamlessly “plug in” additional technologies to meet future business needs.

• Master data management (MDM) provides FTB with a single source of reliable data to leverage across all business processes. This central repository of reliable, timely data will improve almost every aspect of FTB’s business.

• Business process management (BPM) allows FTB to rapidly build, test, deploy, and share business workflows, as well as document and reuse business rules across business processes, as appropriate

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