Spotlight on Reform: Electronic Check Processing at the Minnesota Department of Revenue

When the equipment the Minnesota Department of Revenue used to process check payments was nearing time for replacement, it presented an opportunity to go beyond just replacing old equipment, and to devise a new process that addressed many of the agency’s existing challenges and costs. The Department of Revenue started the Electronic Check Presentment (ECP) project to seize that opportunity. ECP aimed to eliminate the aging hardware and software, and to find ways to utilize existing hardware and software already in use for some of the agency’s other processes. Overall, the Department of Revenue hoped this would avoid the need to invest in very specialized equipment, reduce data capture costs, and speed up the process for capturing and depositing check payments.

A new electronic check processing system was developed and finally implemented by the ECP project team in September 2010. The ECP project is creating significant cost reductions for the Department of Revenue, with an annual estimated cost savings of about $118,000. It also helped the agency avoid over $1,000,000 in costs that would have been associated with purchasing new, specialized equipment.

The new process in the Department of Revenue is also being used to process checks for other state agencies, including the Department of Employment and Economic Development (DEED) and the Minnesota Pollution Control Agency (MPCA). The impact of this continuous improvement effort extends far beyond just the agency where it began.