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Financial AccountingUniversity of Washington

Operational Performance Dashboard As of June 2011

FY 2011 Quarter 4 (Apr-June 2011)

Financial Accounting’s Mission

To provide financial reporting, consulting, trouble-shooting and education to the University community as well as maintain the integrity and credibility of the University’s financial accounting system.

Our key processes include:

Customer Service to Campus and Central Offices Manage Financial InformationAnnual Financial Reporting Process Journal VouchersManage Field Advances Manage Revolving FundsManage UW Operating Bank Account Process Non PO Related Wire and ACH PaymentsPerform and Review Significant UW GL Reconciliations Use Resources EfficientlyDevelop Staff

Prepared: November, 2011

Financial Management, University of Washington 1 of 12 Report Contact: Dan SchaafFinancial Accounting Operational Dashboard

FINANCIAL ACCOUNTINGUniversity of Washington - Operational Performance Dashboard FY 2011 Quarter 4 (Apr-June 2011): Prepared: November, 2011

CUSTOMER FINANCIAL

MeasureCurrentOutput

Measure Target

Gap(Target-Output)


Measure Target

Gap(Target-Output)

1. Annual Report completion – processes completed earlier (later) than target timetable

8. Dollar amount of miscellaneous agency accounts in deficit

$22K $100K No Gap

(a) Closing university records (1) 0 (1) 9. Dollar amount of overdue field advances $713K In Process

(b) Recasting records to GASB format (11) 0 (11) 10. Number of transactions for BOA ePayables & ACH

2,809 To Be Discussed

(c) Writeup, analysis & audit (1) 0 (1)

2. Banking & Accounting Operations Productivity

63 TBD

INTERNAL BUSINESS PROCESS LEARNING & GROWTH


Measure Target

Gap(Target-Output)


Measure Target

Gap(Target-Output)

3. Number of manual entry transactions 6,728 20,000 No Gap

4. CTI’s & ISD’s processed later than one month following the date of service

2% 1% (1%)

5. General ledger accounts reconciled 90% 100% (10)%

6. Financial Accounting effectiveness (process improvement)

4.1 0 No Gap

7. Dollar amount of unmatched receipts $7.9M In Process


Item # 1: Annual Report Completion Time

DEFINITION: Represents the average number of days ahead of (behind) planned completion dates for each fiscal year’s Annual Report preparation process.

ANALYSIS:Financial accounting has spent considerable time streamlining internal processes, however in recasting our records we rely heavily on process partners.

We had meetings with our partners prior to year-end and negotiated delivery dates that several process partners were unable to achieve.

We also had added complexity reformatting of our financial reports for the discrete presentation of a new component unit.

NEXT STEPS:Financial Accounting is in the process of reevaluating all of the components of the financial reporting process and is aggressively pursuing opportunities for improvement.


(7) (6)

(2 )

(6)

(4)

(6)

(10) (11)

(14)

3

(9)

(15)

(1)

(11)

(1)

(18)

(16)

(14)

(12)

(10)

(8)

(6)

(4)

(2)

-

2

4

6

Processes completed earlier (later) than target timetable

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Good

Target = 0

Days

early

Days

late

Close University Records Recast records to GASB format Write up, analysis and audit

Item # 2: Banking & Accounting Operations ProductivityDEFINITIONThis is an index of the cost per unit of service provided by B&AO, setting Jan 2008 at 100. The cost is determined by allocating payroll to one of four “units”. The units are the number of advances, lines of accounting entries, matched lines in a reconciliation, and “other” which represents unallocated payroll. The cost/unit is standardized to start at 100, then averaged.

ANALYSISAt the end of June 2011, the index was at 63, meaning that services provided are 37% cheaper now than they were at the beginning of 2008.

The index breakdown is: Accounting entries (75), Advances (97), reconciliations (18), other (61)

NEXT STEPSB&AO has embraced continuous improvement and continues to streamline our processes.


0

20

40

60

80

100

120

140

Mar-08 Jun-08 Sep-08 Dec-08Mar-09 Jun-09 Sep-09 Dec-09Mar-10 Jun-10 Sep-10 Dec-10Mar-11 Jun-11

Standardized Cost per Unit of B&AO's Services

Lower is Better

Item # 3: Number of Manual Entry Transactions

DEFINITIONThis graph represents the number of lines of transactions being manually entered into VDE by the data entry group.

ANALYSISSince 2008, B&AO has transitioned a significant amount of manual data entry transactions to electronic input forms.

Check requests are almost entirely composed of reimbursements. JVs are from GCA.

NEXT STEPSAn electronic reimbursement process platform in Ariba should remove most of the check requests. B&AO continues to move departments over to direct deposit, reducing the number of CTs.


-

5,000

10,000

15,000

20,000

25,000

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11

Manual Accounting Entries, Lines per MonthCT

JV

Check request

CTI & ISD

Other

Item # 4: Number of Delinquent ISDs/CTIs:

DEFINITIONPercent of total count or dollars of Cost Transfer Invoices (CTIs) and Internal Sales Documents (ISDs) that are processed later than the month following the date of service. Late billings lead to untimely budget status as well as the possibility of lost funds (in the case of grants that have closed prior to receiving a bill).

ANALYSISMost of the late-presented CTI/ISD’s continue to be from Oceanography. This group has to wait for Fed approval before allocating charges.Communication with departments submitting late CTI/ISD’s is ongoing.

NEXT STEPSContinue direct communication with recurring late billing departments.


0% 1%

2% 2% 2%3% 3%

5%4%

3%4%

6%5%

2%

3%

2%

3%

5%

4%

6%

4% 4% 3%3%

5%4%

2%3%

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

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-08

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-08

Mar

-09

Jun-

09

Sep

-09

Dec

-09

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-10

Jun-

10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Percent of Total Count of Delinquent Billings to # of Total Billings Recorded in FAS During the Period

0% 1%

8%

4%1% 2%

6%

4% 3%2%

8%

3%

8%

2%

5%7%

6%4% 4%

8%

4%5% 5%

3%2% 1%

9%

3%

Jul-0

7

Aug

-07

Sep

-07

Oct

-07

Nov

-07

Dec

-07

Jan-

08

Feb-

08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Mar

-09

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09

Sep

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Dec

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10

Sep

-10

Dec

-10

Mar

-11

Jun-

11

Percent of Total Dollars of Delinquent Billings to $ of Total Billings Recorded in FAS During the Period

Item # 5: General Ledger Account Reconciliations

Jun-08 Jun-09 Jun-10 Jun-11 0%

2%

4%

6%

8%

10%

12%

14%

13%

6%

10%

3%

4% 4%

Percentage of Unreconciled General Ledger Accounts

% of unreconciled GLs by count

% of unreconciled GLs by dollar amount

Good

Target = 0% DEFINITION Represents the percentage of general ledger accounts which have not been reconciled, as confirmed by the departments which are responsible for reconciliation.

ANALYSISThe total number of accounts being monitored for reconciliation at 6/11 is 671. Total dollars being reconciled (absolute value) is $43.5 billion.

The number of unreconciled accounts decreased from 72 in June 2010 to 17 in June 2011. The department with the largest number of unreconciled accounts is the Benefits Office (59%), while GCA had the highest unreconciled dollar amount (57%). NEXT STEPSContinued attention and follow-up, as well as more direct communication of the UW’s GL reconciliations policy, should help to ensure that the number of accounts not being reconciled decreases even further in future periods. This year Financial Accounting will sample reconciliations done in other departments to test for reasonability and that the reconciliations provide appropriate support for the balances.


Item # 6: Financial Reporting Process Improvement DEFINITIONRepresents Financial Accounting (excl. BAO) process improvements as measured by the number of FTE’s required to support the Annual Report process. Specifically, the complexity of the Annual Report process (as quantified by the number of figures in the audited financial statements and footnotes for which Financial Accounting gathers or develops auditable evidence) is compared against the number of FTE’s supporting the process. The 2010 measure represents work performed on the 2009 Annual Report.

ANALYSISIn the last four fiscal years the University has implemented seven new accounting pronouncements.

In that same period Financial Accounting has reduced FTE’s by 21%.

As accounting has become more complex Financial Accounting has streamlined processes.

NEXT STEPSFinancial Accounting is in the process of reevaluating all of the components of the financial reporting process and is aggressively pursuing opportunities for improvement.


0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11

24% incr in Annual Rpt figures; 19% decr FTE

Expanded MD & A, discrete reporting of UW/Northwest & expanded investment disclosure

Item # 7: Dollar Amount of Un-Matched Receipts

DEFINITIONRepresents the dollar amounts received by UW’s main operating bank account which have not been recorded in the accounting system. The graph shows unmatched dollars at the end of each month, with the current months aged by how long funds have been unidentified.

ANALYSISAs a percentage of actual dollars received in the operating account for a month, the unmatched funds represents a very small percentage.

NEXT STEPSB&AO continues ongoing communication with our significant fund recipient so that we can continue to properly record incoming funds. We have also recently implemented an aggressive reconciliation benchmark mandating that all funds of $50K or greater need to have documentation of attempts to locate the proper accounting of the funds. All amounts less than $50K are not allowed to age more than six months before documentation is made regarding the efforts to find the proper recording.


$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

Current Month 30-90 Days 90-120 Days > 120 Days Old

498 416 446 484 438 494 581 444 431 534 503 541 558 464 488Total FundsReceived ($Mil)

Amou

ntin

Tho

usan

ds

$25M cleared early Jan -mostly Harborview Payroll

Data scrub performed

UW Treasury requested $59M 4/29 Bond Payment funds

Item # 8: Agency Accounts in Deficit

DEFINITIONRepresents agency deficit amounts (i.e., dollar amounts owed by agencies to the University). Agencies are supposed to have enough money on deposit with the UW to ensure that the UW is not in a position of “loaning” money.

ANALYSISThe Agency Account debit balance total was $240K at June 30, 2011, the lowest in several years. At June 30, 2011, Harborview Medical Center (HMC) and Washington Technology Center (WTC) had unusually low deficit balances of $102K and $126K, respectively. The remaining agency accounts in deficit had a combined debit balance of only $12K.

NEXT STEPSWe will continue to remind organizations with ongoing deficit balances that they are obligated to maintain credit balances in their agency accounts.

On March 8, 2010 the University implemented a deficit resolution policy.

Budgets in deficit for >2 consecutive months Budget will be assessed an interest charge at the current internal lending program rate. That rate is currently 5.5%.

Inactive agency budgets w/deficit balances Dept. responsible for covering deficit. If dept. fails to cover deficit in a timely manner Fin. Acctg. will charge the department’s operating budget.


$-

$50

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r-09

May

-09

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09

Jul-0

9

Aug-

09

Sep-

09

Oct

-09

Nov

-09

Dec

-09

Jan-

10

Feb-

10

Mar

-10

Apr-

10

May

-10

Jun-

10

Jul-1

0

Aug-

10

Sep-

10

Oct

-10

Nov

-10

Dec

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Jan-

11

Feb-

11

Mar

-11

Apr-

11

May

-11

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11

Am

ount

in th

ousa

nds

Total Debit Balances other than HMC & WTC ($ 000's)

Good Target = $100

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Apr-

09

May

-09

Jun

-09

Jul-

09

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Feb-

10

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-10

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May

-11

Jun

-11

Am

ount

in th

ousa

nds

HMC & WTC Debit Balance ($000's)

Good Target = $1,000

Item # 9: Dollar Amount of Overdue Field Advances

Oct '09

Nov '09

Dec '09

Jan '10

Feb '10

Mar '10

Apr '10

May '10

Jun '10

July '10

Aug '10

Sep '10

Oct '10

Nov '10

Dec '10

Jan '11

Feb '11

Mar '11

April '11

May '11

June '11

-

100,000.00

200,000.00

300,000.00

400,000.00

500,000.00

600,000.00

700,000.00

800,000.00

900,000.00

1,000,000.00

IPE 30-90 Days 90-120 Days >120 Days Old

$Mil.Ouststanding 6.89 6.72 5.59 5.55 6.06 7.12 6.17 6.51 6.41 6.99 7.77 7.83 7.32 6.94 7.46 7.51 6.76 7.17 6.33 7.56 9.19

DEFINITIONA field advance is an advance of funds to a UW employee for research or educational projects. An accounting of how those funds were spent, and appropriate backup documentation, is due to our office within 30 days of the end of the project.

ANALYSISField Advances are held for a six month period of time. The reporting for spent funds is expected within 30 days of the end of the six month period. Although a perfect scenario would be that there is no overdue reporting, as a percentage of loaned funds we see that most of the overdue reporting is from Office of Int’l Programs & Exchanges (IPE). IPE has a close working relationship with its Field Advance custodians and most of the IPE past due reporting is due to procedural slowdowns at the IPE central admin office.

NEXT STEPSB&AO has begun an analysis of past due as a percentage of recent loaned amounts. Also, we continue to communicate with IPE and other Field Advance custodians to ensure that the Overdue Field Advance dollars are not at risk.


Item # 10: BOA ePayables

Oct-09

Nov-09Dec-

09Jan

-10Feb

-10

Mar-10

Apr-10

May-10

Jun-10Jul-1

0

Aug-10Sep

-10Oct-

10

Nov-10Dec-

10Jan

.11Feb

.11

Mar.11

Apr-11

May-11

Jun-110

500

1,000

1,500

2,000

2,500

3,000

3,500

Number of Transactions for BOA ePayables & ACH DEFINITION:EPayables payments are a method of payment whereby the bank pays the supplier on the due date. At that point our obligation for payment is transferred to BoA. The UW pays BoA in full for the prior month’s card activity on the 5th of each month. Paymode payments are ACH payments issued to suppliers’ bank accounts on the date that the payments are due.

ANALYSIS:A calculation of the potential earnings on funds retained by the UW from the actual bill payment date to card payment date, using the UW’s IF rate (3.9%) for the period 1/1/11 through 6/31/11, shows an estimated savings of $77K.

NEXT STEPS: Continue to aggressively convert UW suppliers to either ePayables or Paymode payment alternatives.
