preparing budgets & the fbm process academic leadership forum 21 october 2014
TRANSCRIPT
PREPARING BUDGETS &
THE FBM PROCESS
Academic Leadership
Forum
21 October 2014
REAL DEL DEGANINTERIM DIRECTOR
OFFICE OF THE BUDGET
2
Budgeting for Your Unit
21 October 2014
Content3
The “Big” Picture
Impact of academic units on University revenues
Building the University’s budget
Academic units and the budget process
The Big Picture: Total Operating Revenues estimated at $768.8M for FY2015
4
MESRS- operat-ing grant,
361,202, 47.0%
FICOR; 25400; 3.3%Sales of Goods &
Services ; 117530.4329473
68; 15.3%
Gifts and be-quests;
5240.046; 0.7%
Tuition and stu-dent charges;
254468.107556757; 33.1%
Short-term investments, 3,007, 0.4%
Endowment investments, 1,913, 0.2%
$’000
The Big Picture: Total Operating Expenses estimated at $775.8M for FY2015
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Academic Salaries; 227128.627; 29.3%
Admin & Support Salaries; 208663.6258; 26.9%
Student Aid; 27623.402; 3.6%
Student Salaries; 9985.182; 1.3%
Benefits; 81717.9622; 10.5%
Net I/F Transfers out ; 54500; 7.0%
Special Projects; 9000; 1.2%
Non-Salary Expend.; 150818.736611193; 19.4%
Pay Equity Phase 2; 6350; 0.8% $’000
The Big Picture: “Financed”Accumulated Deficit Outlook
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FY2002
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
f
FY2015
p
FY2016
p
FY2017
p
FY2018
p
FY2019
p0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
Apr-14 Apr-13
in $
'000
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Building the University’s Budget
See handout
Impact of academic units on University revenues
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Enrolment changes
Research- Indirect costs of research- CRC / CFI allocation calculations
Endowments / Gifts
Specific grants / contracts / community service
Major Revenue Components9
• Enrolment Changes
• Provincial Grant
• Tuition
Academic Units and the Budget Process
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Faculty-level (not directly with academic departments) Each Faculty can adopt its own specific budget process
“The Agreement”
Reached with each Faculty stating: priority investments, targets, and proposed new initiatives
Multi-year and ALL funds
Involves performance measures
Not just incremental
Faculties prioritize requests from their academic units
NOT done directly by the Provost’s Office
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Academic Units and the Budget Process
Priority-focus of the Agreement:Open, Connected, Purposeful: McGill and the Next Five years
Student Life and Learning
Research
Engagement
A Learning Organization
Space
Draft agreement documents stipulated between the AP(BR) and the Faculties (or Admin units) - No template- No dropdown menus and formatted sections- No responses to documents – just one document
Meetings between AP(BR) and units to culminate with a signed agreement by end of November/early December
Integrating with other planning processes:- Enrolment targets- Academic Renewal- Space, IT, etc.
The Agreement: What’s new for the FY16 exercise?
Previous year’s budget +/- allocations for the new year
Cuts from the MESRS will continue:
No indication of changes to the tuition framework • assume rules remain unchanged
No changes to FIO (ancillary fees) framework
The Agreement: What can units expect for FY2016?
Budget allocations: What can an academic unit expect?
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Allocations are to Faculties, not directly to academic departments
Faculties each adopt their specific budget allocation rules
Some allocations provided:
- Academic Renewal- Salary Policy- Benefits- Enrolment Driven Allocation- Indirect Research Cost Allocation- CFI LOF envelope (for wet lab areas)- CRC allocation- Graduate Student Support (through GPSO)- Funding for specific initiatives (priority pool envelopes)
Academic Renewal
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Target complement for each Faculty
TT salaries covered by central
Related allocations include:- Start-ups- Endowed chair contributions- Provostial hires- Salary award incentive contribution- Contribution to recruitment costs- Moving expenses (including immigration fees)- French courses
Funds for salaries revert to the central pool when TT staff depart
- http://www.mcgill.ca/provost/files/provost/academic_renewal__hr-budget_feed_1-oct-2012.pdf
CRISTIANE TINMOUTHINTERIM
ASSISTANT VICE-PRINCIPALFINANCIAL SERVICES
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The Financial Budget Model (FBM)
Managing the Budget and year-end results
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Dean has statutory responsibility for the Faculty’s budget
But, Chairs definitely have a role
Results (positive or negative) are carried forward to the next fiscal year
Positive carry forwards in 1A funds (unrestricted operating) are put into a reserve at the Faculty level
Use of the reserve funds require permission from the Provost
The Financial Budget Model (FBM)
The Financial Budget Template- is used for submitting the agreed upon multi-year and multi-fund
planning- has an Excel-based tool capturing all revenues and expenditures
per org - provides an overview of the spending capacity on a multi-year,
multi-fund basis (e.g., provision of carry forward for future expenditures)
- allows a financial plan aligned with the Agreement - is aligned with the Budget Book and Financial Statements- must be completed by the Faculty Financial Officer with input
from various Faculty/Unit members, upon request
Enables stewardship and management of all fund types
Allows for variance analysis: - Budget allocations vs. Actuals by account grouping
Planning with the FBM
Forecasting is - not an “exact science” - a projection into the time period(s) under consideration - based on assumptions, previous experiences, and reasonable
expectations FFO must
- consult with VP, Dean, Chairs, Directors, professors, others for input
- be familiar with your Unit’s historical data (prior year actuals)- have supporting documentation and estimates- proactively seek information from professors, researchers and fund
holders- plan for the use of carry-forwards and ensure that these are
included the Agreement Remember that the FBM
- must cover 3 fiscal years of budget- includes ALL fund types
Variance Analysis
Reports for Variance Analysis with:
- Recording of changes relative to the Budget (e.g., Academic Renewal Plan)
- Adjusted Budget (if applicable) versus Actual- Actual to Actual
Enables a more accurate analysis of the financial situation
Close coordination with FFO/FST
Resources and Support
FBI website: www.mcgill.ca/fbi
FBI reports: http://www.mcgill.ca/fbi/support/reports-tools
FAQ’s :http://www.mcgill.ca/fbi/faqs
Other Highlights
PCard default FOAPAL- Tri-Agency funds will no longer be accepted as default funds- Requires an alternate default fund for all Pcards- Communications are going out and most successful to date
Picture Receipts- Change in procedure for Research Grants and Contracts only- Effective 15 November 2014, all expense claims submitted on
research grants/contracts must include original receipts for reimbursement
- Capturing pictures of receipts with an iPhone is not considered an acceptable substitute for original receipts when charging research grants and contracts
Questions for discussion
Can my unit increase its enrolment-driven budget by accepting more graduate students?
Are there resources available to fund teaching for new graduate programs?
What mechanisms in place for funding the development of new initiatives and programs?
Enrolment-Driven allocation25
- Current allocations for FTE changes for regulated students:
Faculty Ugrad Masters PhD Agric & Env Sc $3,500 $6,000 $11,000 Arts $2,400 $4,000 $7,500 CCE $2,400 $3,600 Dentistry $9,000 $6,000 $11,000 Education $2,400 $4,000 $7,500 Engineering $3,000 $5,000 $11,000 Law $2,400 $4,000 $7,500 Management $2,400 $3,600 $7,500 Medical Residents $4,000 Medicine $3,500 $6,000 $11,000 MSE $3,000 $4,000 Music $3,500 $5,000 $7,500 Relig. St. $2,400 $4,000 $7,500 Science $3,000 $6,000 $11,000
Questions for discussion
Unionization is increasing our costs for TAs and possibly lecturers, but our budgets are not increasing. What can we do?
My unit pays a number of course lecturers, and McGill’s hourly rates are not as competitive as some of our neighbours’. How can I best manage this situation?
Questions for discussion
Is budget-interpretation training offered to new chairs/directors?
What are chairs/directors expected to do when it comes to reviewing budget reports and statements?