Luma challenges prevent Idaho from distributing $101 million in interest earnings  – Idaho Capital Sun

The state of Idaho has been unable to distribute more than $100 million in interest payments to state agencies due to issues implementing the new Luma business system, State Treasurer Julie Ellsworth said. 

The interest is earned from state funds that are not yet being spent. Typically, the interest is distributed to agencies monthly. But the Idaho State Treasurer’s Office hasn’t distributed the interest payments since July 1 because staff have been unable to verify agencies’ fund balances through the Luma reports, Ellsworth said in an interview at the Idaho State Capitol in Boise. 

Through the end of December, the withheld interest added up to $101.6 million, Ellsworth said. Once the interest from January is calculated, the total could exceed $120 million, she said.

“I can’t distribute it until I have complete confidence in the fund account amounts in every state agency,” Ellsworth said. “That was where the hiccup is.”

Ellsworth told the Sun the issue only affects state money, not local funds. 

Idaho State Controller Brandon Woolf said his goal is to resolve the interest payment issue by the end of this month. 

After errors hamper reports, Idaho State Controller’s Office says new Luma system works

Ellsworth told the Sun she was on the verge of “panic territory” in December over Luma, the lack of automation and the amount of reconciliation being done manually. But since then, Ellsworth said her confidence has increased as the different agencies’ staff have worked together and diagnosed challenges. 

Ellsworth also emphasized that the state’s funding is secure and in safe keeping – it’s just a matter of verifying fund balances to calculate distributions. Once the fund balances are verified, the interest can be distributed, she said. 

Ellsworth said Luma has great promise and can increase the security and resilience of the state’s finance and business systems. But for now, Ellsworth said Luma is not living up to its potential. 

“It’s a shiny new spaceship that will take us to soaring heights, however this expensive spaceship is currently parked on a trailer and being hauled out daily just to get the basic tasks in state government completed,” Ellsworth said in an interview. “This is not flying to the moon.”

What is the State of Idaho’s Luma system?

Ellsworth said her office is facing numerous challenges related to the implementation of Luma, a new statewide business system that all state employees and state agencies are tied into.

State officials launched Luma on July 1, replacing a pair of old state business systems that dated to 1987 and 1988. Those old systems had outlived their useful lifecycles and were more vulnerable to security threats, state officials have said. 

Luma isn’t just a computer program or a piece of software. It is a massive, statewide business system that centralizes all of the state’s business, budget, procurement, payroll, financial management and human resources system.

The Idaho Legislature authorized the creation of Luma in 2018 through House Bill 493, estimating the new system would cost $102 million spread over five years. 

Luma is based in the Idaho State Controller’s Office. Woolf, the Idaho state controller, said Luma does work. On Feb. 6, Woolf told the Idaho Legislature’s Joint Finance-Appropriations Committee that Luma has processed more than 473,000 invoices worth more than $7.1 billion since July 1.

But when the state went live with Luma in July, fewer than 50% of the state’s employees had completed basic level training on Luma, the Sun previously reported. 

Since July, there have been a series of challenges, procedural errors and data entry errors that hampered Luma’s launch. 

Some of the challenges included:

There have been enough publicly disclosed errors that Speaker of the House Mike Moyle, R-Star, called Luma a joke during a November meeting of the Legislative Council. On Friday, Moyle and a bipartisan group of eight legislators submitted a letter asking the Office of Performance Evaluations undertake an evaluation of Luma and provide a report to the Idaho Legislature. 

In his presentation to JFAC this month, Woolf stressed that Luma is operational, but still has yet to be optimized. 

“A massive change like this does take time,” Woolf said. “And it does take time for the dust to settle and to continue to optimize and to make these improvements. Is it where we want it to be right now? I would say no, but I think we have made great progress.”

Rep. Wendy Horman, the Idaho Falls Republican who co-chairs JFAC, expressed her appreciation for Woolf and his team meeting with legislators to identify challenges and create timelines for addressing them. Horman said progress is being made. But she emphasized that setting the state’s budget hinges on accurate, reliable state data.

“As you know we can’t do our business unless we have accurate, verifiable data and I appreciate the work that your office has put in recently to making sure we are verifying the numbers that we are dealing with,” Horman told Woolf on Feb. 6. 

Teams from the Idaho State Controller’s Office and Idaho State Treasurer’s Office have been meeting for weeks to diagnose challenges associated with Luma.

In a joint interview at the Idaho State Capitol on Feb. 8, Ellsworth and Woolf described several ongoing challenges when it comes to sharing data between the Idaho State Controller’s Office and Idaho State Treasurer’s Office using Luma. 

The $101 million in withheld interest payments to state agencies was one of the challenges.

According to documents Ellsworth and Woolf provided to the Sun, other challenges include:

• The need for state employees to take extra steps to manually reconcile bank activity that should be automated under Luma.
• The need to manually provide partial payroll transaction data that should be automated to the Idaho State Treasurer’s Office.
• Historical payment details were missing in Luma reports provided to the Idaho State Treasurer’s Office. The Idaho State Controller’s Office has now manually provided the missing information, and a review for missing information is still in progress.
• The need to reconcile historical transaction data. Additional monthly reconciliations cannot be started until the reconciliation process is automated and the historical transaction reconciliation is complete.

In addition to those challenges, Ellsworth told the Sun that the Luma system often “times out” or glitches during lengthy transactions and shuts down.