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Newsletters Current Issue |
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Kuali Financial System (KFS) Update
The preliminary work assessed higher education’s readiness for a community source financial system project and its applicability across colleges and universities through a planning grant from the Andrew W. Mellon Foundation to NACUBO in 2004. In March 2005, after more than a year of evaluation, partner coalescing, and preparatory work, the Kuali Financial System (KFS) received a $2.5 million grant from the Mellon Foundation to help complete the software development. Founding partners are Indiana University, the University of Arizona, the University of Hawaii, Michigan State University, San Joaquin Delta Community College, Cornell University, NACUBO and the rSmart Group. On October 25, 2006 the first phase of the open source Kuali Financial System was released. The Kuali Financial System is essentially a rewrite of IU’s current Financial Information System (FIS) developed in the early 1990’s and eventually will be the system deployed at IU. Since it is based on the FIS functionality and business rules it should prove easier to deploy on all of IU’s seven campuses. The design has been extensively evaluated by NACUBO experts, the Kuali partners and the rSmart Group, and was chosen by the founding partners over the complexities of commercial offerings. KFS was designed from the beginning to fully meet the standards of both the Governmental Accounting Standards Board and Financial Accounting Standards Board and incorporates the following features: flexible chart of accounts, distributed access, robust workflow engine supporting electronic authorizations and business rules, and a scalable, modular design. This latter is critical to the success of KFS since it needs to be functional for any Carnegie Class institution, from small two year colleges to major research institutions. Resources are pooled from the six founding institutional partners and the newest, The University of California. Partners invest by either contributing cash or personnel resources for a defined period. The Kuali Governance Structure includes a Kuali Board comprised of members of each school, NACUBO and the rSmart Group. The functional decisions of the Kuali Financial System are composed of members from each school and sub-committees for each module. The technical developers are managed by a full time project manager. For its part, IU reallocated more than a dozen individuals to this effort, from senior executive leadership to staff members. While it has been an extremely burdensome effort, it has also been a growth opportunity for staff and leadership. The ultimate impact on the institution is still to be realized, but it seems that that IU will achieve cost avoidance by not spending significant financial resources on an outside financial system. What does this mean for fiscal officers and delegates of Indiana University? The Kuali Financial System is modeled after IU’s FIS. The data elements in the e-docs, the to and from friendliness of the financial transactions, the built in business rules and automatic validation of data will all be the same. This will allow staff to easily transition from the current FIS to the new and better java web based version of Kuali. Implementation of the system will initially start with the conversion of the general ledger and the chart of accounts sometime in 2008. Most FIS users will not be impacted at this stage. This will be quickly followed with the conversion of the financial and chart of account e-docs, capital assets, accounts receivable, budget construction, contracts and grants and labor. Users will start to see the impact of the changes with the subsystem replacements. The Kuali.org website is a wealth of information. Included in the website is a test drive of Phase I functionality, which contains most of the financial and chart of account e-docs. Please take the time to get into the test drive and look at the functionality. The test drive provides all IU staff and faculty who work with the FIS an opportunity to experience the new look and feel of our future financial system.
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The FMS Newsletter Online serves the Indiana University community by keeping faculty, staff, and students informed about university financial policies, initiatives and changes in business practices, and updates and enhancements to the Financial Information System (the university-wide electronic financial transaction processing environment). |
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Last updated: 05/17/2007 |
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About seven years ago, Indiana University administrators were considering alternatives for replacing the existing financial information system. The replacement was necessary due to the use of outdated technology in the FIS. They looked at the standard options such as retooling the current financial system or buying a vendor package. Retooling alone, while it usually ensures that the institution will get the features it needs, brings with it the ongoing responsibility for its maintenance and enhancement. The uncertainty in the industry, the lack of control over maintenance costs and upgrades, the inflexibility of features for higher education and the perceived increase in workloads for central, departmental and colleges made purchasing a proprietary enterprise resource planning system (ERPs) from a vendor less attractive to IU for replacing its legacy financial information system. The more than $20 million price tag was also a significant factor. Seeking a better strategic path, IU turned away from both these options and began formally exploring the collaboration option. IU joined with NACUBO, a commercial partner and several other institutions in need of a financial system, to explore the possibilities of this innovative approach to this complex and costly aspect of institutional administration.