Using Advanced Mobile Field Data Collection Technologies to Comply with GASB 34 Reporting Requirements


Author: Michael Perry
Organization: Datria Systems, Inc.


Summary
Governmental Accounting Standards Board Statement No. 34 (GASB 34) requires that state and local governments report on the value of their infrastructure assets. This paper will discuss the benefits of using the latest developments in voice technology and GPS in a mobile computing environment to collect data complying with GASB 34 reporting requirements in a consistent, safe, and cost-effective way. Proven speech-enabled data collection capabilities allow surveyors to capture vital information faster than by filling out forms or navigating menus. Real-time DGPS allows surveyors to see where they are and where they've been so they don't get lost or miss pieces of data. Post processing data entry delays are eliminated.

Description of problem:
The most significant pronouncement in the history financial reporting requirements for the more than 84,000 state and local governments in the United States was issued in June 1999 when the Governmental Accounting Standards Board (GASB) unanimously approved Statement No. 34 (GASB 34): Basic Financial Statements - and Management's Discussion and Analysis - For State and Local Governments. Among its many new provisions, GASB 34 required that state and local governments begin to report on the value of their infrastructure assets including roads, bridges, water and sewer facilities, and dams.
GASB 34 provides wide latitude in how infrastructure assets must be reported. However, for state and local governments to comply, it will probably take significant efforts to define appropriate policies, develop consistent methodologies, deploy asset management systems, and assemble necessary documentation. Governments may elect to report their infrastructure data using any established method of depreciation or through the Modified Approach.

Impact to Government Agencies
The entire GASB 34 market consists of the over 84,000 state and local governments required to meet the reporting mandates established in GASB Statement 34. To help minimize implementation expenses, the accounting board is allowing a phased rollout where state and local governments are categorized by total annual revenues; a description of the categories and compliance dates follows:

These dates apply to newly acquired or built infrastructure. Governments have four additional years to report on all preexisting assets. There are steps that many organizations will want to take now to put your organization in the best position for assessing the value of your community's public works assets. And most of the reasons for doing asset management will likely have nothing at all to do with accounting.

Large State and Local Governments
Defined as having more than $100M in annual revenue (as reported in 1999), these organizations will be the first to seek compliance assistance. This segment of the market represents approximately 5,600 governments and begins with the fiscal year after June 15th, 2001. While many agencies have already started their GASB 34 initiatives, it is believed that many will opt to wait another year as initial policies are reviewed and a compliance plan is built. These customers represent the smallest physical number of opportunities, but will represent the largest total amount of money spent on GASB 34 compliance.

Medium State and Local Governments:
Defined as having between $10M and $100M in annual revenue (as reported in 1999), these customers will need to seek compliance beginning with the fiscal year after June 15th, 2002. This segment of the market represents approximately 22,400 governments (Appendix B). As earlier stated, this group as well as the smaller governments is expected to wait until next year to begin their compliance efforts.

Small State and Local Governments:
Defined as having less than $10M in annual revenue (as reported in 1999), these customers represent the last group that will need to become compliant. Per GASB 34 they are required to begin compliance beginning with the fiscal year aster June 15th, 2003. The total number of governments in this segment is approximately 55,440.

Overall, spending for GASB 34 related services and solutions is expected to reach into the billions of dollars during the first 5 years. Estimated costs for compliance projects range from $35,000 to $500,000 for cities, $35,000 to $2 million for counties, and $2 million to $4 million for states. It is important to note, however, that these numbers reflect the total cost of implementation including all aspects from administrative work to financial report preparation. At this time, it is unknown what percentage of these figures are for data collection and condition assessment.

State and local governments are given the choice of using two approaches to asset reporting. The first is the depreciation method, wherein the assets are depreciated using established depreciation methods using existing costs. It is important to note that during the first three years of the GASB 34 rollout, governments are required only to report on the value of new assets (purchased after June 15, 2001). Reporting on retroactive assets is not required until four years after the initial rollout. The other approved method for compliance is called the modified approach, wherein the condition of the governments infrastructure systems must be reported on every three years. It is the job of the government to establish a baseline reporting system and maintain a self-imposed level of quality.

Approximately 1/3rd of the 84,000 state and local governments are categorized as Phase I and Phase II candidates, although this market only represents 27,000 governments it is this segment of the market that will most likely represent the largest market opportunity. Of these 27,000 organizations, it is estimated that approximately 9,500 will choose the modified approach over the depreciation method to meet the mandate.

Asset Management using Speech Recognition technologies
Asset management can be described as a systematic process of maintaining, upgrading, and operating physical assets, such as roadways and bridges, in a cost-effective way. It combines engineering, business management, economics, and the latest computer-aided technology. A major goal of asset management is to use the process in both the short- and long-term decision-making in the planning, budgeting, and operating functions so the physical assets stay at the highest condition level. For governments, the idea is to preserve the infrastructure network to insure safety and serviceability, while optimizing all available resources.
Items needed to complete an asset management system include inventory, condition assessment, asset evaluation, performance prediction measures and trend indicators, cost estimates of options and resulting impacts, and engineering/economic optimization tools.

It is reported by Standards and Poors that approximately 47% of state and local governments currently have an asset-reporting database that includes infrastructure information.

Organizations that choose to account for their assets using the modified approach will need to to find a cost effective and time effective way of reporting on the location and condition of their assets. Advances in technologies including laser scanning, GPS, and speech recognition can help these organizations manage the collection and reporting of their assets.

Speech recognition can be used as the front-end application for any number of PC based asset management systems. Using speech recognition, the end user only has to speak in what he or she is seeing at the time, VoCarta's patent pending technology facilitates the integration of speech, GPS, and other digital sensors. Using this type of integrated system can facilitate the fast and accurate collection of asset information.

Emerging technologies including wearable computers, and new smart devices can also be used to improve on the speed and accuracy of GASB 34 data collection and condition assessment tasks.

By using an asset management system in conjunction with advanced mobile field technologies, customers will be able to develop long-term network goals, emphasize preservation, proactively manage deterioration, develop a comprehensive maintenance plan, and a commitment to allocate the necessary resources over time.

The hidden cost: data collection and condition assessment

While many organizations have opted for the modified approach to GASB 34 compliance, many are finding out that the cost of performing the required data collection may in some cases outweigh the initial cost savings associated with the modified approach. Data collection has traditionally been a costly and difficult endeavor. Manual data collection is labor intensive and can be highly inaccurate.

Why does data collection persist as such a costly and difficult endeavor? There are several reasons:

VoCarta Field
Unlike traditional pen-and-paper or keyboard-based mobile computing solutions, VoCarta Field allows for a natural, intuitive speech interface resulting in a faster, more accurate, and more cost effective field data collection system. Using a mobile computing device (pen-based computer, laptop, handheld computer, etc.) mobile users are able to operate in an "eyes up and hands free" environment while moving between objects. To enter observations into the VoCarta system, the operator only has to speak into the headset microphone. The operator's speech is combined with any digital sensor information (GPS, bar code scanners, RFID readers, digital cameras, testing equipment, etc.) and a detailed record is entered into the database. Errors can be corrected on the fly as the software can repeat spoken observations and correct entries in real-time.

For these enterprises, data collection and verification has become a major cost concern. The more data-rich the environment, the more costly the data collection and maintenance becomes—while processing and analysis costs remain relatively constant.
In the data-intensive computing model, there is a proportional inequity between cost and benefit. That is, the data collection side of the model requires 80 percent of total system costs, while 80 percent of the productive benefits are derived from data exploitation (refer to Figure 1). However, if data collection efforts are reduced, there will be a corresponding reduction in operational benefits in data exploitation. Without data, the enterprise cannot capitalize on the functional performance of its information systems.

Enabling Technologies
While speech-to-data input software has been under development for at least the last five years, enabling technologies have finally reached a critical stage of development that supports the technical requirements that make speech-to-data possible and practical:

Advanced Field Hardware
Mobile computing has become a major growth market in the last year, as the price-performance point of hardware has reached a level acceptable to mainstream corporate users.
Only recently has hardware emerged suitable for the rigors of the field. These systems may be used in the ultimate remote location. They can be used in conjunction with difficult tasks, often requiring heavy physical labor, and they can work miles from the nearest building, electric outlet or phone jack. They are able to withstand exposure to rain, snow, mud, dirt and extreme temperatures.
For speech-enabled applications, the hardware requirements are higher than for more traditional input devices. While a Pentium processor, 16 MB of RAM and 500 MB of storage is considered the minimum, users will generally do much better with at least a 200 megahertz processor, 32 MB or more of memory and a 1 GB hard drive.
Fortunately, these requirements are easily met by today's high-powered mobile hardware options-at reasonable prices. Many hardware alternatives have arrived on the market: traditional-style notebooks, pen-based computers, Personal Digital Assistants (PDAs) and, more recently, wearable computers that are lightweight, with innovative screen options and the processing power required for optimum speech-input performance.

Ancillary Technologies
The ability to integrate speech along with other supporting technologies into a homogeneous field-computing tool has also helped make speech-enabled computing practical. These technologies include:

These devices can now be easily incorporated into a functional mobile field unit and can be operated with simple speech commands. This type of integrated field data collection solution provides a significant increase in overall productivity for field users.

Improved Speech Software
In addition, the core speech recognition functionality has improved substantially. Many early speech systems-especially the low-end mass marketed applications-showed limitations in the types of speech input they could receive. Commands had to be spoken slowly, with clear breaks between each word. They could not compensate for a variety of dialects or individual speech patterns. Today, more advanced applications overcome these limitations. It is feasible, even easy, to create a vocabulary that compensates for varying speech patterns and can differentiate words, even when presented at a normal speed with normal speech patterns.

For more information, please contact Datria Systems at www.datria.com

Datria Systems
7211 South Peoria St.
Suite 260
Englewood, CO 80112
303-728-1300
www.datria.com