A Financial Simplification Strategy Sponsored by the VC - Chief - PowerPoint PPT Presentation

A Financial Simplification Strategy Sponsored by the VC - Chief Financial Officer Pierre Ouillet Presented to the Academic Business Officers Group Conference @ UC Irvine April 2016

Simplified Operating Funds Initiative Discussion Points  What is SOFI and why are we doing this  Primary Considerations  What will it look like  Update on UC San Diego Implementation  Questions March 2016 2 April 2016

Are you crazy? ! 3 March 2016

Simplified Operating Funds Initiative UC San Diego’s Vision for the Future…  UC San Diego will: Core Campus Resources  Pool “core” campus resources to support the core academic investment and general institutional operations  Continue fund accounting for revenue streams  In order to:  Improve financial management across the campus  Focus on outcomes rather than fund color management People  Optimize expenditures to meet the Programs expectations of the Governor , Legislature, Outcomes students and other stakeholders  Clearly depict the cost of fulfilling the Strategic Operating Plan campus core mission, and the resources that support that cost March 2016 4 April 2016

Simplified Operating Funds Initiative What’s in scope; what is not  Budgets allocated and expenditures transacted on 2 funds, rather than 60 $900M $200M 5 April 2016

̶ ̶ Simplified Operating Funds Initiative What SOFI does; what it does not  The SOF Initiative is consistent with UC’s Working Smarter Initiative and is an effort to  Streamline campus financial management, for example » Almost all departments across campus are funded on one core fund » Sharing the same core fund eases transfers between departments and across VC units » One fund eliminates juggling of personnel among funds to manage compensation inflation Simplify fund accounting and department transacting, for example  » Constraints tied to specific sources are not applicable to the new core fund numbers » Expenditure transfers are replaced with budget transfers to balance organization budgets » Express card transactions now only have to be classified for cost type instead of type and fund Enable departments to focus on strategic priorities and outcomes  » Easier data gathering and reporting Enables quicker response times to management requests for information May save time which can be redirected to other priorities  SOFI does NOT  Change budget decisions or allocation methodologies Result in budget reductions  April 2016 6

Maybe you aren’ t crazy? ! March 2016 7

Simplified Operating Funds Initiative Primary Considerations  UC S an Diego is partnering with stakeholders to achieve both campus goals and systemwide needs  At the system level, primary considerations identified include: Fulfilling reporting and regulatory requirements of the State, Legislature,  and other stakeholders from data housed in Corporate Systems  Public perception and external audit Changes required to PPS   Budgeting recurring resources 8 April 2016

Simplified Operating Funds Initiative Past Precedent and Current Practice  The proposed solution for reporting to stakeholders meets with past precedent and current practice Past precedent Current practice • OP’s “Common Fund” - pre-Funding • Many campuses still use the “Ed Fee Streams Initiative, a pool of various Proration” to un spend their 19900 funds collected from campuses and funds at fiscal year end spent on a single fund • This leaves payroll expense detail • The “19900 pool” decoupled with the grossly overstated on State GF Funding Streams Initiative was a • OP Institutional Research calculates combination of State GF, Tuition, State the prorated share of State GF to and Federal UCGF ICR, and misc. UCGF Tuition and UCGF ICR for individual fees and income campuses and applies this ratio when • Campuses overspent their “19900” responding to PRAs funds, then moved excess expenses to • OP Institutional Research also Tuition at fiscal year end identifies certain organizations (in • Expenses were distributed by function addition to program codes) to identify from State GF to Tuition and ICR using expenses for Public Service one expense account number April 2016 9

Simplified Operating Funds Initiative Consolidated Core Strategies  University of British Columbia and many UC campuses, including San Francisco and Riverside, have achieved various levels of consolidated core funds Univ. of British Columbia UC San Francisco UC Riverside Operat ing Fund Campus Core Fund “ 19900” Provincial Grant S tate General Funds S tate General Funds Domestic Tuition Tuition Funds* Tuition Funds* University generated General University generated General International Tuition Funds Funds Research Overhead Research ICR (ALL) Research ICR (only 6975x) Investment Income Internal Overhead Recovery Internal Overhead Recovery Ancillary Dividends Patent Income Patent Income S TIP/ TRIP Income S TIP/ TRIP Income *excludes: S S FF , PDS T, Financial *excludes: S S FF and PDS T Aid on Tuit ion April 2016 10

Simplified Operating Funds Initiative Worthy of note  The one-time up-front effort to implement SOFI is significant and distributed.  There will be at least one year of transition activities.  Expenditures still need to be tracked (by program, account, etc.) for departmental reporting needs. 11 April 2016

I need visuals, Lady! March 2016 12

Simplified Operating Funds Initiative SOFI Addresses Stakeholder Expectations  Current State  Future State Managing and expending resources with Under SOFI, resources are managed good intent to achieve strategic priorities and expended with the same strategic and student outcomes still results in priorities and student outcome unintended financial outcomes under objectives, but better meets external strict fund accounting expectations FYE FYE 13 April 2016

Simplified Operating Funds Initiative Meeting Expectations and Priorities  Expense proration P r i o r i t y o r d e r results in prioritized relationship of resources to program P r  Benefit: can be adjusted i to respond to external o r requirements i t  Any reserve balances y are held in most flexible o funds r d e r Instructional S upport: Library, Public S ervice, Academic S upport, Research, S tudent S ervices, S tudent Financial Aid, University Extension Institutional S upport: O&MP, General Admin Other: Auxiliaries, Unallocated transfers for debt/ capital/ other 14 April 2016

Y ee-haw!! It’s happening! 15 March 2016

Simplified Operating Funds Initiative Project Timeline  Below is a very high-level timeline for an implementation date of July 1, 2016 16 April 2016

Simplified Operating Funds Initiative Communications and Engagement  The SOFI project was undertaken in early 2015 and has been guided by both a Work Group and a Steering Committee  We are actively collaborating with central offices both locally and at UCOP: Budget, Institutional Research, Accounting, and ITS  Campus communication has been ongoing through Existing networks of the Work Group and Steering Committee (e.g., ABA, SC-SPOC, VC fiscal groups,  Council of Chairs, Department Chairs)  Letters from the Chancellor Presentations made to  Faculty through Academic Senate committees (Budget & Planning, Administration Council) » FinLink standing committee » VCHS Senior Administrative Leadership » VCHS Assistant DBOs » EVC Assistant Deans » VC MSOs/Fiscal Contacts Groups » Lead staff in central offices are engaging colleagues on implementing solutions  Established VC Implementation Coordination Team comprised of all VC units  17 April 2016

Inquiring minds must know! March 2016 18

Simplified Operating Funds Initiative Where to find information  Find the SOFI website  sofi.ucsd.edu  blink.ucsd.edu/go/sofi  Contacts for information: Core Project Team  Traci Carpenter, Project Manager, 858-534-0502, tccarpenter@ucsd.edu » Deanna Richardson, Core Team, 858-534-5619, d2richardson@ucsd.edu » Ashley Gambhir, Director-CI, OSI, 858-534-7694, agambhir@ucsd.edu » Sponsor  Sylvia Lepe, AVC-CBO and Sponsor, 858-534-5357, slepe@ucsd.edu » 19 April 2016