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

March 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

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March 2016

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Are you crazy? !

March 2016

Simplified Operating Funds Initiative

 UC San Diego will:

• 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

• Optimize expenditures to meet the

expectations of the Governor , Legislature, students and other stakeholders

• Clearly depict the cost of fulfilling the

campus core mission, and the resources that support that cost

UC San Diego’s Vision for the Future…

4

Core Campus Resources

People Programs Outcomes

Strategic Operating Plan

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Simplified Operating Funds Initiative

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What’s in scope; what is not

 Budgets allocated and expenditures transacted on 2 funds, rather than 60

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$900M $200M

Simplified Operating Funds Initiative

What SOFI does; what it does not

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 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

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Maybe you aren’ t crazy? !

Simplified Operating Funds Initiative

Primary Considerations

8



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

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Simplified Operating Funds Initiative

Past Precedent and Current Practice

 The proposed solution for reporting to stakeholders meets with past precedent and

current practice

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Past precedent

• OP’s “Common Fund” - pre-Funding

Streams Initiative, a pool of various funds collected from campuses and spent on a single fund

• The “19900 pool” decoupled with the

Funding Streams Initiative was a combination of State GF, Tuition, State and Federal UCGF ICR, and misc. UCGF fees and income

• Campuses overspent their “19900”

funds, then moved excess expenses to Tuition at fiscal year end

• Expenses were distributed by function

from State GF to Tuition and ICR using

• ne expense account number

Current practice

• Many campuses still use the “Ed Fee

Proration” to unspend their 19900 funds at fiscal year end

• This leaves payroll expense detail

grossly overstated on State GF

• OP Institutional Research calculates

the prorated share of State GF to Tuition and UCGF ICR for individual campuses and applies this ratio when responding to PRAs

• OP Institutional Research also

identifies certain organizations (in addition to program codes) to identify expenses for Public Service

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Simplified Operating Funds Initiative

Consolidated Core Strategies

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• Univ. of British Columbia

Operat ing Fund Provincial Grant Domestic Tuition International Tuition Research Overhead Investment Income Ancillary Dividends

UC San Francisco

Campus Core Fund S tate General Funds Tuition Funds* University generated General Funds Research ICR (ALL) Internal Overhead Recovery Patent Income S TIP/ TRIP Income

UC Riverside

“ 19900” S tate General Funds Tuition Funds* University generated General Funds Research ICR (only 6975x) Internal Overhead Recovery Patent Income S TIP/ TRIP Income

*excludes: S S FF , PDS T, Financial Aid on Tuit ion *excludes: S S FF and PDS T

 University of British Columbia and many UC campuses, including San Francisco and

Riverside, have achieved various levels of consolidated core funds

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.

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I need visuals, Lady!

Simplified Operating Funds Initiative

SOFI Addresses Stakeholder Expectations

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 Future State

Under SOFI, resources are managed and expended with the same strategic priorities and student outcome

• bjectives, but better meets external

expectations

 Current State

Managing and expending resources with good intent to achieve strategic priorities and student outcomes still results in unintended financial outcomes under strict fund accounting

FYE FYE

Simplified Operating Funds Initiative

Meeting Expectations and Priorities

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 Expense proration results in prioritized relationship of resources to program  Benefit: can be adjusted to respond to external requirements  Any reserve balances are held in most flexible funds

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

P r i

• r

i t y

• r

d e r P r i o r i t y o r d e r

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Y ee-haw!! It’s happening!

Simplified Operating Funds Initiative

 Below is a very high-level timeline for an implementation date of July 1, 2016

Project Timeline

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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

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Inquiring minds must know!

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