Business & Economy

Audit questions state web portal fees

A new report from the Vermont state auditor puts under the microscope the system for building and maintaining state websites.

The audit focuses on fees collected to fund the Vermont Information Consortium (VIC), a group of IT professionals created by the Legislature in 2006 that works across state government to build and maintain web services.

The consortium, a subsidiary of a nationwide company that does similar work in other states, manages the state of Vermont’s main website, Vermont.gov, and a variety of websites and online-based services accessible through that portal. Since VIC’s establishment, it has built 103 websites and 78 online services for the state, according to the audit.

Through the online services, Vermonters can file tax returns, register vehicles, renew professional licenses and more.

Doug Hoffer
Doug Hoffer. Photo by Roger Crowley/VTDigger

Thirty-seven of the online services that VIC builds or maintains goes to pay for the consortium’s work. In total in fiscal year 2015, the VIC collected $1.9 million.

Of those 37 services, 31 of them have a statutory fee that goes to the state.

In some cases, the VIC fee comes directly from the online customer.

For instance, in fiscal 2015 there were 3,495 online transactions to pay child support. The state collected $1.37 million in fees and taxes on that. In addition, customers paid $14,748 in VIC fees through those transactions.

In other cases, the state agency pays the fee directly to VIC.

In 2015, more than 20,500 Vermont State Park reservations made online totaled over $2.14 million. People making reservations did not pay a fee to VIC, but the Department of Forest, Parks, and Recreation paid $64,349 to VIC.

Under state law, a process for approving VIC fees requires oversight from the Department of Information and Innovation as well as approval by the governor and the Legislature.

However, according to the audit report, 16 VIC fees on services established between 2013 and 2015 did not go through the process. They were negotiated between VIC and the state agency involved with the service, then approved by the director of web services, who works for DII.

New fees don’t need to go through the statutory process, according to the audit. Six of those 16 fees did not meet certain criteria, the report says.

The audit notes “a clarification of statute may be necessary” to limit confusion when certain VIC fees can be established without following the process spelled out in law.

Auditor Doug Hoffer said Thursday the impetus for the report on the web portal and VIC’s fees came earlier this year when lawmakers on the House Ways and Means Committee questioned the VIC system.

He said there are key elements of the system that need to be better understood. For instance, he said, DII should ensure that VIC is transparent about how it develops the costs of its services.

“This system, for a variety of reasons, doesn’t seem like it is properly monitored,” Hoffer said.

The web portal for state services has many “moving parts,” Hoffer said, including the fees collected under state statute, fees paid to credit card companies, and fees paid to cover VIC’s costs. The report serves to provide more information about the system.

“There is a cost, and it’s not insignificant,” he said.

The audit notes that not all parts of state government use VIC to meet their needs for establishing and running online services. Some use outside companies instead.

“This may be a good time for people to say, here we are now, how’s it working what are the alternatives,” Hoffer said.

Rep. Janet Ancel, D-Calais, who chairs the House Ways and Means Committee, said the panel has had an interest in the process underlying web portal fees for years.

Though the system has been in place for quite a while, she said, it does not go through the same system of review that most fees do.

Janet Ancel
Rep. Janet Ancel, D-East Montpelier. Courtesy photo

Ancel says the report will help the committee better understand the questions they should be asking.

“We wanted to be sure that we are as transparent about these fees, which Vermonters pay, as we are about everything else,” Ancel said.

The audit makes five other recommendations to DII and the Web Portal Board. One recommends the board meet semi-annually as directed by statue. The audit found the board met just once in 2014 and did not meet at all in 2015.

DII Commissioner Richard Boes said Thursday that the department agreed with the recommendations offered in the audit, including the suggestion that the Legislature consider clarifying the statute on the policy of establishing fees.

Because there are not frequently new services, the board does not always have new information to meet about, Boes said.

Boes said that Vermont is one of about 30 states using this model for providing web portal services.

“It’s well thought out, it provides good services for states, and its generally been seen as very successful,” Boes said.

However, Vermont is in a unique situation, he noted.

“The concern for Vermont is we’re the smallest state using this model, and do we have the number of transactions necessary to support this type of model going forward,” Boes said.


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Elizabeth Hewitt

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  • Moshe Braner

    The state says “please file your taxes online rather than on paper, it saves us money” – and then charges a fee for the online filing?!

    I don’t know about VIC, but a lot of online services are overpriced, once they establish themselves as a monopoly. Uber and ebay come to mind. I am talking about the part of the transaction that the web portal provider keeps – a lot, given that it is an automated computer system with relatively few employees.

  • Mary Alice Bisbee

    It seems very interesting to me that child support payments are charged a fee while one can sign up for park usage for FREE! I do hope legislators take a real look at these figures. Thank you, Doug.

  • Paul Denton

    I just hope they don’t mess up something that is working pretty well. I use the Vermont Tax Department, DMV and Dept of Labor business portals and they are extremely reliable and easy to use. If it ain’t broke, don’t fix it.