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Collections staff will have more time to collect thanks to streamlined process that cuts errors

IN BRIEF: The Attorney General’s Office collects outstanding debts that are owed to Ohio. It’s a billion-dollar responsibility that staff take very seriously. Now they’re taking it to a higher level of accuracy and efficiency, using Kaizen to power the improvements.

MORE TIME TO COLLECT: With a streamlined process that prevents errors from entering the system, collectors will have more time for collecting -- instead of having to research errors and seek out needed information.

TIME IS MONEY: For special counsels and third-party vendors, a simplified process for fee reconciliations will save time and money. Reconciliations have a cost equivalent estimated at $1,000 to $2,000 per firm per month. Focusing on the 85 special counsels, and assuming a conservative 25% savings, the yearly savings for all firms will range between $255,000 and $510,000.

BETTER USE OF TIME: At client organizations, client staff will be spending less time researching -- which allows more time for billing and audits. Faster certification downloads will lead to further time savings and enhanced collections.

Team members combined their ideas with additional input from a staff survey. After considerable discussion, possibilities were narrowed into a set of consensus-supported actions. The above list was then used to develop a set of detailed action plans.

The Attorney General’s Office is responsible for collecting outstanding debts owed to the state of Ohio -- everything from past due book fines at state libraries to unpaid corporate income taxes. It’s a complicated job that involves thousands of transactions and millions of dollars each month.

Basically, collected money comes in from five different channels, including direct pay, tax offsets, the Internet, and elsewhere. The money flows through the process and ends up as a payment stream to clients, the AG’s Office, Special Counsels, third-party vendors, and unidentified funds.

Collections Enforcement has always gotten the job done. But now they’re doing it even better thanks to a rigorous Kaizen event. Changes developed by the Kaizen team will allow money to move more quickly through the processing pipeline -- from the time it’s received to when payment distributions are completed.

That’s good news for clients and vendors. It means less frustration for staff. And it’s saving time and money.

The process had never been evaluated from end to end for efficiency and effectiveness. When team members went about creating a detailed process map, some were surprised because their work had kept them focused on one area only -- and they didn’t know much about the rest of the process. 

Everyone was surprised by the enormity of it. An entire wall was needed to map the full process with its 238 steps, 46 handoffs, and 28 decision points. Processing time ranged from 15 days all the way to 11 months.

In analyzing the situation to develop a package of improvements, the team factored in a pending Request For Proposal that involves major IT work. They took known components from the RFP and built from there. Immediate action steps form an “interim plan,” while additional actions are on hold until the RFP-related work begins.

Among the immediate actions is a full-court press to eliminate errors and resulting rework. Staff are benchmarking key data, tracking back errors to find their point of origin, then using their insights to identify root causes and develop focused solutions.

In some cases, errors are getting into the system because collection letters are insufficiently clear in requesting needed information. So improvements are under way, with some letters being fine-tuned while other letters are fully rewritten and redesigned. The aim is ensure that all communications are clear, concise, and consistent -- which increases the likelihood that incoming information is complete and accurate the first time around.

Another big action step involves training. Training plans are being developed in several key areas, including lockbox processing, handling lockbox errors, addressing/preventing errors, and using new and revised letters.

Additional action plans extend further into the future. Most of these link with IT work embodied in the pending RFP. For example, the Kaizen team sketched out plans for consolidating the multiple payment channels into one payment system. A possible future process was developed to go with this. This future-state process map is a draft only, envisioned at a very high level. But it’s a model of efficiency with just 25 steps, 8 handoffs, and just 2 decision points.

As the interim plan is fully implemented, followed by the IT improvements and final development of the streamlined process, results will add up in terms of saved time and enhanced collections.

For the Attorney General’s Office, the improvements will allow collectors to spend more of their time collecting -- because fewer errors coming into the system will reduce the time they now spend researching and fixing errors. Also, increased use of electronic processing will lower printing and postage expense.

For special counsels and third-party vendors, fee reconciliations will be much easier to process. At a cost estimated at $1,000 to $2,000 per firm per month, the savings will be substantial over time. Focusing just on the 85 special counsels, and assuming a conservative 25% savings, the cumulative annual savings for all firms will range from $255,000 to $510,000.

At client organizations, client staff will be spending less time researching -- which allows more time for billing and audits. Faster certification downloads will lead to further time savings and enhanced collections.

Overall, a faster process that’s free of errors allows for faster access to funds. And that’s good for everyone.

During the team’s capstone presentation, one staff member said that “it’s a real eye-opener to see people come together like this.” The mapping process shows where you fit in the “puzzle, and you know what you can do to make it better."

Another person talked about the ups, downs, and ultimate ups of the Kaizen process. “Some of the discussions maybe became a little heated,” she said. “But it wasn’t an attack on the person, it was an attack on the process. It shows that people take great pride in their work. Each person who sat in on this has a vested interest because they're proud of their job, and they're proud of working for the Attorney General’s Office."
This report was published February 16, 2012. Projected and actual results may have changed since then. For the latest info, contact LeanOhio or the AG's Office.
    OAG contact: Pat Brobeck
    (614) 644-9172

Ohio Attorney General
Collections Enforcement

Payment Processing: "Follow the Money" Team
January 2012

Team members
Team members: Ted Angel, TPV Representative; Dean Eyestone, In-house Collection Account Rep; Gillian Wells, TVP/SC Collection Account Rep; Marissa Hoffecker, Accounting Manager; Pat Brobeck (Deputy Director of Quality Assurance and team leader); Becky Cassidy, Business Transaction Supervisor; LaTonya Dunn, Legal Staff Deputy Director; Jessica Wilson, Accounting Representative; Rich Thompson, Assistant Director, Internal Audit; Sally Wood, Taxation Supervisor; Carly Albert, Finance; Yancy Wessell, ODOT observer.

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