Budget Model Redesign Initiative Project Implementation Kickoff

May 4, 2017

Welcome!

Agenda The objective of today’s discussion is to share the next steps for the Budget Model Redesign Initiative

as we implement and go operational

• Recap of the Budget Model Initiative

• BMRI Project Implementation Support Structure

o Project Leadership Team and Project Management Team

• Operational Support Teams

o Model Development

o Policy and Process Review and Development

o Analysis and Reporting

o Training

• Team Expectations and Project Implementation Timeline

• UM Budget Process Flow

• Resource Management and Budget Model Management Structure

• Next Steps

• Questions

Initiative Timeline Development of the new budget model has spanned 12 months and will continue through the

remainder of FY18.

Phase Overview

Phase I: Visioning Develop a clear understanding of direction through an assessment of current

resource allocation practices.

Phase 2: Financial Modeling Build-out a “pro-forma” model to provide a platform for testing different model

alternatives.

Phase 3: Consensus Building Address change management through methodical, data-driven stakeholder

engagement.

Phase 4: Infrastructure Development Develop supporting tools, processes, and governance to carry out budget

development.

Phase 5: Parallel Process Test a new model to understand outcomes if the new model were implemented.

May-Jun.

‘16

Jul.-Aug.

‘16

Sep.-Oct.

‘16

Nov.-Dec.

‘16

Jan.-Mar.

‘17 FY18 (Apr. ‘17.-Mar. ‘18)

5. Parallel Process

1. Visioning

2. Modeling

3. Consensus Building

4. Infrastructure Dev.

Guiding Principles The initiative’s Steering Committee developed a set of principles representing its “ideals” for a

new model.

Align resource management, planning, and allocation with the University’s mission and strategic

priorities.

Enhance collaboration between and within academic and support units.

Incent creativity, innovation and the pursuit of revenue opportunities to position the University

for a strong, sustainable future.

Promote fiscal understanding, responsibility, and accountability throughout the University.

Be straightforward and transparent.

Model Overview Operating funds flows under the new model are highlighted by 1) revenue allocations, 2) cost

allocations, 3) University Fund contributions and strategic investments, and 4) expenses and transfers.

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Tuition and Fees EAL Operating GrantOther Operating

Revenues

Allocations for Instruction, Academic Support,

and Research Activities

Direct Operating Revenues

Academic Units and Ancillary Central Support Units

University Fund

% of

Select Revs.

Resources

(Cost Allocations)

Services

Academic Units and

Ancillary Expenses and

Transfers

Central Support Unit

Expenses and Transfers

Strategic Investments

Revenue Allocations The new model allocates select revenues to units using formula-driven incentives; other

revenues are allocated directly to units with no change relative to today.

Revenue Allocation Drivers Allocation Notes

Undergraduate

Tuition*

Credit Hour Based Tuition: 85% Weighted CH by Faculty of

Instruction / 15% CH by Faculty of Student Record

Program Based Tuition: Direct to generating unit

Includes all undergraduate tuition accounts.

Undergraduate

Differential Fees* Same as Undergraduate Tuition (International CH only)

Additional tuition paid by international undergraduate

students.

Graduate Tuition* Direct to generating unit Includes all graduate tuition accounts net of bad debt.

Graduate Differential

Fees* Direct to generating unit

Additional tuition paid by international graduate

students.

Distance Tuition* 100% CH by Faculty of Instruction (Distance CH only) Includes all distance tuition accounts.

Other Fees Direct to generating unit

Select general fees: 100% student headcount

HCT allocated fees include application fees, registration

fees, library fees, student services fees, late payment

fees, reinstatement fees, deferral fees.

EAL Operating Grant*

65%: Unweighted allocation results of undergraduate, graduate,

and distance tuition

30%: Research fund revenues (and affiliate unit research for HS)

5%: Graduate and Faculty (Non-Instruction) FTE

Targeted components direct to generating unit

Targeted revenues include ACCESS grants.

RSF Funds Direct to generating unit Allocation based on historical RSF funding split.

Overhead Revenue Direct to generating unit Does not go through allocation split.

All Other Revenues Direct to generating unit (status quo) Includes sales and services, grants and contracts, and

other miscellaneous revenues.

* - Subject to University Fund participation rate

Cost Allocations Central Unit costs are packaged into nine cost pools and allocated to faculties, each with a

unique allocation variable.

Cost Pool Allocation Drivers Example Central Units

Academic Credit Hours Taken by

Students

CATL, CHERD, Graduate Studies, Learning and Technology Centre, OIA, OVP (Academic) and

Provost, VP (Academic Affairs)

Administration Total Direct Expenditures

(excluding clinical exp.)

Audit Services, Campus Planning, Change Management, Fair and Legal Practices, Financial

Services, Human Resources, Risk and Management Safety, Treasury Services, VP

(Administration)

Executive Faculty and Staff FTE Advancement, Alumni Relations, Convocation and Special Events, Donor Relations, Marketing

and Communications, External Relations, President’s Office, University Secretary, VP (External)

Facilities

Net Square Footage

Occupancy (with step down

allocations)

Physical Plant, Utilities

Information

Technology

Faculty, Staff, and Student

Headcount Chief Information Officer, Information Systems and Technology

Libraries Faculty and Student

Headcount Director Offices, Libraries, Library Acquisitions

Research Sponsored Research

Revenues

Animal Care, Human Ethics, Research Services, Operating Research, Research Quality

Management, Technology Transfer Office, VP (Research)

Student Services Credit Hours Taught by

Faculty

Admissions, Career Services, Enrolment Services, Indigenous Student Centre, International

Centre for Students, VP (Students)

General

University

Total Direct Expenditures

(excluding clinical exp.) Capital Projects, Special Projects, Other University-Wide Expenses

University Funds Faculties are asked to contribute a portion of select revenues to the University Fund, which is

used to balance faculty budgets and make strategic investments.

University Funds Overview

Rationale The University as a whole needs the ability to act as one entity with respect to key initiatives.

Fund

Principles

Funds can help fund long-term initiatives by advancing capital, provide critical subsidies to kick-start

initiatives, and prompt specific actions from Deans, as a few examples

Size of fund pool should enable leadership to “steer” Manitoba in the direction that will ultimately benefit the

University as a whole

Funds provided to any unit should not be viewed as an annual entitlement

Pool should be funded from a diverse revenue portfolio rather than a single source to increase stability

Participation fees need to ensure units are held harmless at implementation; thus the rate needs to be

high enough to ensure surpluses are available to fill deficits

Fund

Application

Rate of 17.75% applied to undergraduate tuition, undergraduate differential fees, graduate tuition, graduate

differential fees, distance tuition, and EAL revenues

Opportunity to decrease rate over time

Communication/consultation

Executive ManagementProvost & VP (Academic)

VP (Administration)

Executive ManagementProvost & VP (Academic)

VP (Administration)

David Collins, Vice-Provost (IPAP) (Champion)Kathleen Sobie, Executive Director, Financial Planning (Champion)

Heidi Adamko, Office of Change ManagementAdam Gerhard, Director, IST Planning and Governance

Gord Pasieka, Financial ServicesHolly Madden, Senior Budget Officer Representative

David Collins, Vice-Provost (IPAP) (Champion)Kathleen Sobie, Executive Director, Financial Planning (Champion)

Heidi Adamko, Office of Change ManagementAdam Gerhard, Director, IST Planning and Governance

Gord Pasieka, Financial ServicesHolly Madden, Senior Budget Officer Representative

Deans & Directors Council

Deans & Directors Council

Operational Support Team (OST) Leads

TBD, Project ManagerAnil Rattan, Financial ServicesMark Walc, Financial Planning

Operational Support Team (OST) Leads

TBD, Project ManagerAnil Rattan, Financial ServicesMark Walc, Financial Planning

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Model Development (Mark)

- Enrolment Services- Financial Planning- Financial Services- HR: David Muir- Institutional Analysis- Space Planning- SRP

-

- Others as required

Pro

ject

Man

agem

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Analysis and Reporting (Anil)

- Enrolment Services- Financial Planning- Financial Services- Institutional Analysis- Space Planning- SRP

- Enrolment Services- Space Planning- Others as required

Training (Anil)

- Financial Planning- Financial Services- Learning and Organizational Development

- CommunicationsOthers as required

Policy and Process Review and Development (Mark)

- Provost & VP Academic- Enrolment Services- VP Administration- Financial Services- VP Research- University Secretary- SRP

- Cassandra Davidson (fees)- Others as required

May 1, 2017

Proposed BMRI Implementation Support Structure

Finance Working Group, Information Services and Technology, Office of Change Management, Integrated Planning

TBD, Administrative Support

TBD, Administrative Support

Huron

Huron

Huron

Huron

Kurt HanoomansinghTechnical Lead

Kurt HanoomansinghTechnical Lead

TBDOffice of Change

Management

TBDOffice of Change

Management

Executive Budget

Committee (ECB)

Executive Budget

Committee (ECB)

Finance Working Group

Finance Working Group

Project Leadership Team

• Structured to include individuals who will represent key stakeholders:

o End users of the budget model and software (e.g. Units, Financial Services)

o Service providers and supporters of the model infrastructure (e.g. Provost Office, Financial Services,

Information Services and Technology, Change Management)

• Provides overall project direction

• Approves the appointment and responsibilities of the Project Management Team

• Approves project plans, authorizes and oversees the work of the Project Management Team

• Meets monthly (or as needed) with Executive Management to provide project updates

• Meets bi-weekly (or as needed) with the Project Management Team to receive status updates and to provide

direction

• Communicates regularly (monthly or as needed) with Deans and Directors Council and the Finance Working

Group to provide project updates, or to seek consultation as required

Project Management Team

• Responsible for overall project management

• Develops and executes project implementation plan

• Leads and oversees the work of the operational support teams in these four critical areas:

o Model Development

o Policy and Process Review and Development

o Analysis and Reporting

o Training

• Team includes individuals that will provide support for:

o Project management

o Change management and communication

o Technical support to provide continuity on:

- the build of the Planning Budgeting and Cloud Service tool (PBCS)

- User Acceptance Testing (UAT) and training

• Meets bi-weekly (or as needed) with the Project Leadership Team to provide status updates and/or elevate issues

• Communicates and solicits feedback from subject matter experts pertaining to work within the operational support

areas

• Meets weekly with the Operational Support Teams

Operational Support Teams

Model Development

• Develop recommended sub-processes of the budget model

• Deadlines for key deliverables

• Collection and validation of data used to forecast University revenues

• Strategic Planning Process

• Process for review of all unit budget submissions

• What information should be presented? In what format? To whom?

• Process to manage adjustments to allocation variables

• e.g. Changes to tuition or EAL grant assumptions after revenue allocation

• Process for review and update of drivers

• Create data dictionary for allocation drivers and other data elements

• Define FTE, Sponsored Research, etc. and document the source of all data

Operational Support Teams

Policy and Process Review and Development

• Identify existing processes and policies impacted by the new Budget Model

• e.g. Campus Development Initiative (CDI), Targeted Tuition, salary increases, internal cost

recoveries, etc.

• Recommend enhancements to or elimination of existing processes and policies

• Should CDI still be based on salaries? Could it be funded through University fund?

• Recommend and develop new processes and policies required to operationalize the new budget model

Operational Support Teams

Analysis and Reporting

• Support:

• Central, Academic and Ancillary units core reporting requirements

• scenario planning conducted by units and augment tool as needed

• forecasting activities using the tool

• Create:

• fiscal trend reports/dashboards

• allocation variable trend reports

• a repository for standardized reports

• Collect feedback on reporting outputs

• Establish process for ad-hoc and new report requests

• Respond to feedback through revised reporting

Operational Support Teams

Training

• Develop:

• training plans – budget model & software

• training schedule and feedback forum

• Facilitate training workshops to meet immediate and ongoing needs

• Respond to training requests through content development and delivery

• Assess skills needs across stakeholders

Team Expectations

• Share knowledge

• Represent your functional area as a subject matter expert

• Provide input and advice related to this initiative

• Make recommendations to Project Leadership Team

• Meet weekly or as needed

• Consult with other subject area experts as needed

• Provide guidance and support for all aspects of the Budget Model

Project Implementation Timeline

UM Budget Process Flow

01 May – 31 July 31

01 September – 31 October

UM Budget Process FlowDraft

Group/Process

CentralSupport

Units

ACollect Data and Develop Assumptions

Academic and

Ancillary Units

Central Unit Allocations Committee

Provost / VP Admin

Board

Financial Services

BDevelop Cost Allocations

CDevelop Budget Requests

DFinalize Funding Decisions

EReforecast in Fiscal Year

A4Review

projections and drivers and develop assumptions

where appropriate

(e.g. enrolment, tuition, etc.)

A6Provide budget

guidance to Central

Support Units

A3Develop UM- wide revenue

projections and allocate via drivers.

A5Review

projections

A1Kick off budget process with call

letter

B1Complete

budget requests

with direct revenues & expenses

B2Present full

budget presentation

to CUAC

B5Provide revenue allocations, cost allocations and central labour

costs

B3Review

operating strategic and

budget requests

B4Prioritize strategic requests

C1Complete

budget requests with

direct revenues and

expenses

C2Present full budget to Provost

(Academic) or VP Admin (Ancillary)

C5Consult advisory

groups as needed

C6Consolidate requests for

review

D4Consolidate and present final budget

D3Adjust

budgets based on funding

decisions

D1Make

fundingdecisions

D5Review and

confirm budget

D2Communic-

atefunding

decisions

D6Approve budget

E1Manage

to approved budgets

E2Update

tuition & fee

forecasts periodically

E3Review

budget to actuals

variance

E4Reforecast

open budget months

Last Edited: 05.03.2017Last Edited By: A. Rattan

Indicates SRP Overlap

Executive Budget

Committee

C3Prioritize strategic requests

A2Hold internal

budget planning

meetings to review

expectations for

upcoming year

C4Review

priorities

18/19 01 October – 30 November

Normal

01 October – 31 December 01 January – 31 March 01 April – 31 March

Indicates Normal Budget Yr

Indicates 18/19 Budget Yr

01 August – 30 September 01 October – 31 December 01 January – 31 March 01 April – 31 March

Resource Management Operating in the new model will include some fundamental changes to how resources have

been historically managed at the University.

Unit-level planning will focus on revenues and expenditures rather than “baseline” vs. “fiscal” funds.

This model changes the relationship between faculties & central units—how do we manage this?

SRP/SPP allocations will be part of University Fund distribution process—to subvent or not subvent?

Data timing will determine how responsive live model is to change; current proposal is for revenues to

be allocated based on actuals, but costs to be allocated based on budget.

Carry forward and deficits will be based on actuals relative to budget—how do we manage

carryforward? Who will be able to accumulate carryforward? How do we limit the risk of deficits?

This is a model in which you can’t hide, but one that provides both directions and provides

opportunities.

Where to we go from here?

Budget Model Management Structure

Next steps 1. Project team members will begin work at the end of May / beginning of June. Watch for recurring Outlook

calendar invitations:

• Project Leadership Team members:

– Meet monthly with Executive Management; bi-weekly with Project Management Team

• Project Management Team members:

– Meet bi-weekly with Project Leadership Team; weekly (or as needed) with Operational Support

Teams

• Operational Support Team members:

– Meet weekly (or as needed) with Project Management Team

– Develop critical deliverables and implementation plans

2. Space is currently being sourced for the Project Management Team and Operational Support Teams:

• Open area and close proximity to Administration Building

• Potential space in Fitzgerald Building

3. Communication to Project Executive, Deans and Directors Council, Finance Working Group and the

University Community will begin at the end of May / beginning of June, and ongoing thereafter

Questions?

Contact Information Operational Area (Analysis and Reporting, Training)

Anil Rattan

Functional Analyst

Anil.rattan@umanitoba.ca

474-7055

Operational Area (Model Development, Policy and Process review and Development)

Mark Walc

University Budget Officer

Mark.walc@umanitoba.ca

474-9232

Please follow the link below for detailed information regarding the Budget Model Redesign Initiative

http://umanitoba.ca/admin/budgetplanning/budgetmodelredesign.html