budgeting and financial management at case 101 overview of the case budget session 2 – november...

Budgeting and Financial Management at Case 101Overview of the Case Budget

Session 2 – November 16, 2006

John Anderson, Provost

Christine Ash, VP of Planning & Budget

Ginny Leitch, Associate VP of Budget & Financial Planning

Budget and Financial Management at Case 101Course Objectives

Session I Understand the alignment between

academic and financial prioritiesUnderstand the budget process on a university and school level

Session II Ability to read and understand the University’s Budget Book

Session III Become familiar with financial drivers: endowments, debt and working capital

Office of Planning and BudgetsReporting Lines

ProvostAcademic

VP Planning & Budget

(Split Personality)

CFAOFinance and

Admin.

Office of Planning and Budgets Functions

The reorganized Office of University Planning and Budget will oversee the following major functions (Aug. 2004):

• Financial planning linked to the strategic plan (five-year plans, budget development)

• Budget management (forecasting, compliance, control)

• Institutional research (benchmarking, internal/external reporting, trend analysis)

Budget Reporting Structure

For planning and budget purposes, the Schools, through their Deans,

report to the Provost.

Central Offices report to the President, the Provost, or the CFAO.

All of the above have a fiduciary responsibility, and serve as financial stewards of the University.

Budget/Management Systems

Current System:• Decentralized

• Every Tub on its Own Bottom (ETOB)

Proposed System:• Decentralized

• Responsibility Center Management (RCM)

Financial Planning/Budget/Forecast Process (FY07)

Return to Level 5

Level 1 May-Aug.

Resources

Level 4

Sep./Dec./Mar.

Level 3

Annual Submission, Mar.-Apr.

New Budget Cycle Starts July 1

Level 2

Annual Refresh

Dec.-Feb.

Level 1

FY2006 Comprehensive Review

Annual Refresh

FY2011 Comprehensive Review

Sep.-Dec.

Responsibility Centers

Review Allocation Formulas & Implement/Enhance RCM

Five-Year Plans

Next FY Budget

Quarterly ForecastAgainst Budget

FY Close

FSBC

UPC

UBC

Schools& Res.

CentersUGEN Aux. Serv.

Univ. Serv.LibraryPlant

NetworkStudent Serv.

Resource Key:FSBC – Faculty Senate Budget CommitteeUPC – University Planning CommitteeUBC – University Budget Committee

THIS CYCLE ASSUMES THAT A STRATEGIC PLANNING PLATFORM EXISTS – VISION/GOALS/OBJECTIVES

Timeline

Fall

Winter

Spring

June

Update Guidelines(Tuition Rates, Endowment Payout Rate,

etc.)

Prepare five-year plans

Prepare the next year’s budget

Budget approved by the Board of Trustees

Budget CategoriesIncome

Tuition – academic year/summer, undergrad/grad/professionalEndowment – restricted/unrestrictedGifts – restricted/unrestrictedResearch & TrainingOverheadStateOtherAuxiliaries – food services/housing

Direct ExpenseRestricted – salary/non-salary (must equal the total of restricted

endowment/restricted gifts/research & training)Unrestricted – salary/non-salary

Indirect ExpenseUniversity Services – examples, President’s Office/Budget OfficeStudent Services – examples, Undergraduate Studies Office/AdmissionsPlant – utilities/otherITSLibraryAuxiliaries – see above

Example of Allocation Rule

Undergraduate Academic Year Tuition

Every Tub on its Own Bottom (ETOB)• 15% net tuition allocated on share of UG degrees

• 85% net tuition allocated on share of UG CHRS

Responsibility Center Management (RCM)• Same as above, but rather than using current year data, will

use a 2 year moving average

Questions and Answers

budgeting and financial management at case 101 overview of the case budget session 2 – november...

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