Appropriate Excess Balances in the Telecommunications Revolving Account

The Legislature should use excess balances in the Telecommunications Revolving Account to offset general revenue spending on statewide network applications including telecommunications equipment and services.

The Texas Performance Review (TPR) recently conducted a performance review of the General Services Commission (GSC); a report detailing the division s findings was published in October 1992. 1 The following recommendation was taken from that report because it requires legislative action.

GSC s complex billing procedures for the state s Capitol Complex Telephone Service (CCTS) and long-distance services (TEX-AN II) often result in de lays of as long as three months from the time GSC is billed by the telephone companies to the time GSC is reimbursed by state agencies and pays the bills.

For example, GSC received the August 1992 TEX-AN II telephone bill on or near September 15th. GSC then spent three days validating the bill and about one and a half weeks processing a detailed call tape, setting minute rates and allocating the costs to st ate agencies. Agencies receiving a bill from GSC also validated their calls and costs and reimbur sed GSC by late October 1992. GSC, in turn, made a final payment to AT&T by early November. The billing process for CCTS is similar but takes slightly less time since its rates are fixed at $21.85 per line per month. To cope with delays in receipt of paym ents for telephone services, GSC maintains a revolving account to pay for CCTS and TEX-AN II charges. 2

The obvious inefficiencies in this billing process should be addressed in a new telecommunications design currently being considered by the state s Telecommunications Planning Group and IBM.

However, another issue concerns balances in the Telecommunications Revolving Account. While this account was created to address the delay in billing and receipt of funds, it has accumulated a balance of more than $5 million in excess of the amount needed to pay the state s phone bills. While it may be difficult for GSC to estimate the state s monthly phone usage, it seems appropriate that these funds be put to use at a time when the state needs additional revenues t hat will not place further burdens on taxpayers.

A. The Legislature should establish a Statewide Network Applications account within the General Revenue Fund to be used to offset general revenue appropriations for the purchase, upgrade and maintenance of statewide network applications (including telecomm unications) equipment, services and other associated items.

These appropriations should be made based on a plan developed by the Telecommunications Planning Group and submitted to the Legislature.

B. General Services Commission (GSC) should be required to maintain in the Telecommunications Revolving account only sufficient balances needed to pay the bills of the Capitol Complex Telephone System (CCTS) and TEX-AN II; any excess balances should be tra nsferred to the Statewide Network Applications account.

This recommendation would make $5 million available to the Legislature for spending on immediate statewide network applications (including telecommunications needs). GSC should develop a more efficient system for processing telecommunications bills to mitigate the need for such fund balances.

Fiscal Impact
Telecommunications Revolving Account balances will offset general revenue appropriations by the Legislature for the purchase and upgrade of the state s telecommunications and other statewide networks.

Loss to the Gain to the
Fiscal Telecommunications General Revenue Change
Year Revolving Account Fund 001 in FTEs

1994 ($5,000,000) $5,000,000 0
1995 0 0 0
1996 0 0 0
1997 0 0 0
1998 0 0 0

1 Comptroller of Public Accounts, Texas Performance Review, General Services Commission Performance Review (Austin, Texas October 30, 1992), pp. 39-40.
2 Interview with Bruce Schremp, Network Operations and Engineering Manager, General Services Commission, Austin, Texas, September 15, 1992.