Finance department presents FY27 budget, flags $1.4M VT Buys cost and Workday implementation details

The Department of Finance and Management presented its FY27 budget to the Appropriations Committee on Jan. 20, explaining that internal service fund charges are rising because the state has begun operating a new procurement system and continuing ERP modernization work. The department said the Financial Management Fund will increase by about $1.4 million this year to cover VT Buys licensing and staff support, and that the governor’s recommendation includes the increase.

Why it matters: the Financial Management Fund is paid by agencies statewide. Departments will see their internal service fund charges rise to cover new software licensing and support; the change affects budgeting across multiple agencies and carries ongoing operating costs rather than a one‑time investment.

The presentation was given by the department’s commissioner (speaker S2). He described two divisions funded by separate appropriations in the governor’s recommendation: Budget and Management (B106) and Financial Operations (B107). Financial Operations runs the statewide Vision accounting system and provides help‑desk and reporting support; Budget and Management leads preparation of the governor’s budget and hosts five analysts who support statutory reporting and bill reviews.

On modernization, the department said it completed the first phase of its ERP modernization by replacing the legacy Vantage budget system with Workday Adaptive Planning. The budget module implementation cost about $1,100,000, funded from a $12,800,000 ERP appropriation enacted in FY22, and went live in October to meet budget entry deadlines. “It was down to the wire, but we were successful in terms of the training and go live,” the commissioner said.

The department reported recurring savings of roughly $200,000 a year from ending extended support for the old Vantage system and moving to the cloud‑hosted Workday module. The presenter said the new platform is more reliable for data entry and that roughly 120 statewide users gave positive feedback but cautioned the state has not yet realized the full process benefits that will come from later financial and HR system integrations.

Procurement system added to fund: the presenter said VT Buys, a new procurement/contract management product maintained by BGS Purchasing, is now charged to the Financial Management Fund and adds about $1,400,000 in operating expense this year. About $600,000 of that figure is an annual license cost; the remainder covers positions to operate and support the system, which the presenter said may be roughly three positions. The department described VT Buys as integrating RFPs, contract management and encumbrances into Vision, and said the new system fills gaps in contract tracking.

On cost allocation, the presenter explained that internal service fund charges are allocated by a formula that apportions HR/VTHR costs based on employee counts and financial system costs based on transaction volume. He said agencies with higher transaction volumes will see proportionally larger increases and that BGS’s budget will reflect some of the new VT Buys costs.

Reporting detail and statutory requirements: the department disclosed a reporting issue with the new budget module. Current system outputs roll multiple special funds into single line items (for example, “special funds”) rather than listing each special fund and its spending authority separately, and the presenter warned that the delivered reports do not yet show the same per‑fund detail previously produced by the old system. He said DFM will work with the vendor to restore fund‑level detail on the online reports published by the department and by the Legislature’s Joint Fiscal Office.

Staffing and interdepartmental transfers: the presenter noted an IDT (interdepartmental transfer) of about $250,000 that funds a recovery officer position (Patricia Moulton) created administratively in DFM but paid by the Agency of Administration’s Recovery Office to comply with statutory exempt‑position limits. He also described several limited‑service positions tied to ERP modernization, including one funded through Dec. 2026 (~$84,000), and said some positions previously budgeted in FinOps were transferred to DHR, reducing the FinOps IDT by about $325,000.

Committee questions focused on implementation risks, staff training and whether the Workday module delivered measurable process improvements. The presenter said the budget module met on‑time and on‑budget criteria and produced the required statutory reports but acknowledged vendors and staff still need to address display/detail issues and integration work to unlock more functionality.

What’s next: the presenter closed by saying he will next present the governor’s office budget to the committee; staff will continue to work with the vendor to restore fund detail in online reports and to complete remaining punch‑list items on the ERP modernization work.

Quotes from the presentation are drawn from the committee hearing transcript; numbers and deadlines reported by the department (for example appropriation totals and carryforward amounts) reflect the figures the presenter supplied to the committee.