Budgeting & Finance Finance Senior Administrator Orientation August 16, 2012

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Illinois Plan for Protecting our Excellence

Budgeting & FinanceSenior Administrator OrientationAugust 16, 20121Two Broad Financial ResponsibilitiesFinancial Planningensuring the effective deployment of a units resources in support of its goals.

Financial Oversightensuring that expenditures meet institutional, state and federal regulations and guidelines. Beyond that, are public funds being spent wisely?University StructureBoard of TrusteesUI at Urbana-ChampaignPlanning & BudgetingOBFS:Budget OfficePurchasing Grants & ContractsAccountingAITSHuman ResourcesUniversity AuditsUniversity AdministrationUI atSpringfieldUI at ChicagoCITESManagement InformationHuman ResourcesFacilities and Services Office of Sponsored Programs & Research Administration$3University StructureBoard of TrusteesUniversity AdministrationPresidentVice PresidentsAssistant Vice Presidents

University Policy CouncilPresidentChancellorsVice PresidentsCentralized Business ServicesProvosts Plus GroupVice PresidentsProvosts UI atSpringfieldUI atUrbana-ChampaignUI atChicagoChancellorsProvostsVice Chancellors$Campus Budget

5$

FY13 UIUC Budget

(000s)6

$Managing Your Slice

9Duties of an AdministratorTo develop the academic unit strategically within the scope of mission and within resources accessible to the unit; and

To present the case (be an advocate) at the college/campus level concerning the units relationship to strategic concerns of the campus.$10Duties of an AdministratorTo ensure that the academic unit has an effective process for planning and budgeting;To manage the academic units resources as required to adapt to changing opportunities and needs;To ensure that units, programs, and other subsidiary organizations are accountable on appropriate grounds.$11Duties of an AdministratorTo be appropriately entrepreneuriallook to gifts, self-supporting activities, and partnerships with other units;To work with the resources available to your unit (no deficits!);To be responsive to the needs of the institution as a whole.$12Managing Unit FinancesDevelop a summary plan for the year that involves all fundsEach month someone needs to reconcile your account statements. Sit down quarterly to review statusKnow who owes you money; dont forget to collectHave at least two people review transactionsHave your staff attend training$13 Fund AccountingUniversities track funds separately. For most departments: State/tuition. The main operating account for most unitsICR. Overhead on grants & contractsGifts. Each separately tracked. Individual restrictions importantG&C. Each separately tracked. Individual purpose important

Big Picture/Small DetailsKnow the full set of resources available to unit: Unrestricted for unit use: State/tuition, ICR, unrestricted giftsRestricted funds whose use coincides with unit need: some restricted gift funds, self-supportingEach fund separately trackedEach statement reconciledRules of fund use honored (particularly watch donor intent)

Budget Process&Distribution of Funds

$16Budgets are About Making Choices

The Budget Process Spring Campus/U of I requests developedJuly BOT reviews preliminary budget requestSeptember BOT approves U of I budget requestOct/Dec IBHE/University interactionDecember/Jan IBHE recommendations submitted to the Gov. February Governors budget recommendations submitted to LegislatureMay/June Legislature actsJune/July Governor signs appropriation - Budget allocation to units$18College Level PlanningNov./Dec. - Colleges develop annual report following campus planning guidelinesFeb./Mar. - Budget hearings (one per college) led by Provost with assistance of Campus Budget Oversight Committee (CBOC)Late Spring campus allocates funds to collegesSummer College leadership reconciles request with actual allocation State Planning EnvironmentMajor Financial ChallengesState of IllinoisPension shortfallState competitivenessAccess and AffordabilityMaintaining & Improving Facilities

State of Illinois Unfunded Public Pension Obligations(SERS, SURS, JRS, GARS, TRS)(Dollars in Billions)Cumulative Change in State Tax Appropriationby Higher Education SectorPage 23

Change in Real Gross Domestic Product by State1997 2010Page 24

Accessibility and AffordabilityTuitionOne of the highest cost publics; cost growing beyond capacity to pay. All publics receiving pushback

Unmet aid is growing

Updating FacilitiesWe have relied on state funding for facility upgradesLarge state-funded projects are over for the next 5-10 yearsStudent fee helps us not fall further behind on deferred maintenance (roofs, windows, HVAC. . .)How do we support facility renovation?Campus Planning Efforts: Taking action so that Illinois can thriveProtecting our ability to:

Hire & retain the best facultyour reputation depends on itProtect quality and access for our studentsEnsure Illinois remains a leader in higher education

Moving from a Defensive to Competitive PostureEnsure Financial StabilityReduce Central CostsReduce College CostsEnhance Our Revenue BaseStrengthening our FoundationThrough interconnected efforts to:Enhancing Financial Stability& Reducing Central CostsIncreased financial oversightReducing staff size to control costs and accelerate efficiencies (400+ FTE decline)Implementing sunset provisions for centrally funded projectsInvesting in energy conservation$8m+ in annual savings

However, most work is at the unit levelWell Positioned for Challenging TimesSolid financial positionMajor facilities projects240 faculty searches in two yearsStrategic Excellence Hiring ProgramSmall class initiativemajor expansion of small classes in areas that matterMajor financial aid initiativeHowever, challenges remainPlanning is More Important than EverUnit Budget PlanningUnits planning should come from goals in its strategic planunits should look for tie in with college and campus plansKnow how your unit is spending its resources. Does that spending match goals?In challenging times, planning should not be dependant on growth. How can a unit best deploy existing resources?Be creativefind ways to partner with others, find new funding sources, focus efforts on highest prioritiesTake Control!Meet with those who have been successfulAttend leadership/training programsMake choicesdont do everything you have always done, but with lessFind ways to reduce backroom costs. Shared services are taking offStart from the bottom up in redesigning your organizationResourcesAccounting Customer ServiceRon Miner, Assoc. Director. 265-5315

Budgets and Financial AnalysisSuzanne Rinehart. 333-9526

University AuditsDarla Hill, Director. 265-5400

Sheet: State AppropriationsIncome fund*Institutional RecoveriesGrants, Contracts, & Federal AppropriationsGifts & Endowment IncomeDepartmental ActivitiesAuxiliary EnterpriseSheet1State Appropriations (GRF)Tuition (Income fund)*Institutional FundsGrants, Contracts, & Fed AppropriationsGifts & Endowment IncomeDepartmental ActivitiesAuxiliary EnterprisesTotal *State Appropriations$242,784Tuition631,512Institutional Funds158,164Grants, Contracts, & Fed Appropriations476,035Gifts & Endowment Income116,586Departmental Activities127,571Auxiliary Enterprises211,941Total$1,964,593

Sheet11

Gifts & Endowment Income

Sheet2

Sheet3