Division of Transit and Rail (DTR) Reimbursement
By Hayley Kinney, Process Improvement & Change Management Intern
January 15, 2013
Project Personnel
Project Sponsor: Ben Stein, CDOT Chief Financial Officer
Sponsor Coalition: Mark Imhoff, Director of the CDOT Division of Transit & Rail (DTR) and Debra Perkins-Smith, Director of the Division of Transportation Development (DTD)
Project Team: Leah Ware (DTD/DTR Business Manager); Orita Martin (OFMB); Elexis Keener (DTR Accountant); Shane Gendron (HQ Business Office); Eric Ellis (DTR); John Vetterling (Division of Audit); Diana Horton (OFMB/Team Leader).
Mentor: Gary Vansuch, CDOT Process Improvement Director
Division of Transit & Rail Reimbursement Process Vision
“We are committed to providing consistent, clear, and easily understood federal reimbursement requirements to the customer while providing transparency into the status of submitted claims."
Situation Overview
CDOT has experienced a nearly continual backlog of transit reimbursement requests. These reimbursement requests came into the Colorado Division of Transit & Rail (DTR) from grantees, primarily units of local government. Some requests were not received in a timely manner, some were incomplete, and some were inaccurate. Everyone was a loser in this process - CDOT staff spent considerable additional time straightening out reimbursement inaccuracies and attempting to stay on a reimbursement schedule. Grantees were frustrated with lengthy reimbursement times which sometimes caused financial hardship.
What did the Team do?
The DTR Reimbursement Process is a key step in the life cycle of a DTR project. Grantees need to be reimbursed for qualifying expenses in a timely manner. Some of these requests are more time-sensitive than others, but in nearly all cases the requests were taking too long to process. With over 50 current grantees and over 600 annual grant reimbursement requests, it is crucial for all involved that this process is completed in a timely manner. Unfortunately, the process in place was cumbersome for CDOT and for the grantees with frustrating results for both parties.
During the week of July 23-27, 2012, the team met for a Rapid Improvement Event to kick-start the project. The team first developed a diagram identifying the Suppliers, Inputs, Process, Outputs, and Customers (SIPOC) to outline the process. They identified the key customers (the organizations that need to be reimbursed) and the key regulators (Federal Transportation Administration and the Colorado State Controller).
They then mapped out the current state and found that 35 out of 40 steps included waste. Eight of these, however, could not be removed from the process because they were required regulatory business steps. The team was able to remove 26 wasteful steps in the process and hopes this improvement will reduce the reimbursement process to 5-10 business days from the previous 45-365 days or more in the near future. Further inspection of the process revealed that 90% of the time supporting documentation was submitted incorrectly to CDOT. Orita Martin said, “I was very impressed with how much the team accomplished in just our one-week meeting for the DTR Reimbursement project. We were focused and brought new perspectives to the process.”
Recommendations for Improvement
The team identified 12 potential opportunities for improvement within the process. The most critical of these were:
1. Grantee Training Process: The project team recommended developing a process to train the grantees on submitting correct documentation on the new forms developed for that purpose. Grantees will utilize this new training process to understand the standards and expectations required in order for them to receive reimbursement.
2. Refining the rules for evidence of payment: This will clarify what specific documentation is required form the grantee and will decrease the amount of paperwork required for each reimbursement. As a result, the detailed documentation is kept by the grantee so that less paperwork is needed for reimbursement. The grantees will submit their request for reimbursement from CDOT as well as their evidence of up-front payment.
3. Developing a verification process: Once completed, this will confirm that each grantee is maintaining proper documentation and accounting systems. CDOT will contact each grantee at least once per year to verify that grantees are keeping the proper documentation and have an appropriate accounting system in place to maintain these records.
Implementation
The team designed an implementation plan for this new process which includes three phases. The approved implementation plan is underway with the focus currently on phase one in a pilot format. Phase one consists of processing payments for selected grantees under the newly developed guidelines, implementing a verification process, and starting site visits. Additionally, the team will begin to define CDOT’s evidence of payment as well as develop training and guidelines for grantees. Phase two involves expanding the pilot to additional grantees. Also, the team will refine CDOT’s evidence of payment and further develop training and guidelines for grantees. Phase three is a rollout to all grantees. The team believes that communication with internal and external stakeholders (grantees, DTR, Audit, Business Office, Office of Financial Management and Budget (OFMB), etc…) is important as the new process is developed. With the implementation of the new process underway, the team hopes for the pilot to be completed in early 2013.
Targeted Outcomes
Following is a summary of targeted outcomes/goals for this project upon completion:
Future Opportunities
The project team identified the following potential future opportunities:
Creating separate processes for collecting performance data;
Implementing a single portal concept, Sales Force, to collect invoices and documentation in one step; and
Creating a mechanism to trigger the grantee to submit invoices in a timely manner.
Final Thoughts
To better partner with grantees, CDOT sought to improve the DTR Reimbursement process. This process is not only important to CDOT but also to the grantees, who often encountered long waiting times for reimbursement and incurred high financial upfront costs. Eric Ellis explained, "The Lean process has helped reduce redundant steps in the invoice review process. It is anticipated that once fully implemented, the DTR reimbursement process will reduce payment times to our grantees, which will benefit everyone involved." Orita Martin feels this process has been valuable for CDOT. "Every organization should try to improve how their processes function to be more efficient and effective, but people are often so focused on their work duties that they don’t take the time to identify where improvement is needed," she stated. "The lean process allows people to take the time, making it a part of their work duties, to think about what they do daily and how it could be better." The DTR Reimbursement process is one example of how applying lean principles greatly improves the previous state of a process and makes government more efficient.