2015/2016Budget Process Training

January 2015

Sandra Davidson, Director Budgets & PlanningTara Zwep, Financial Analyst, Financial Resources

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Agenda

1) Budget Targets & Planning• Budget Timelines• Budget Target Overview

2) Budget Process & Guidelines• General Budget Information• Special Retirement Incentive Program (Funding implications)

• Salary Budget Procedures (Costs & Funding Responsibilities)

• Budget Process Overview

Budget Timelines

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2015/16 UpdatedBudget Process & Timelines

Sept: Scenario Modeling Budget Cuts • Academic Faculties/Library: 5%, 7%• Academic Support, Administration,

Ancillary: 5%, 8%, 10%

Oct: Planning & Discussion• VPs meet to review scenario modeling

results• 14/15 Enrolment/Revenue Budget

Update • Town hall presentation

Nov/Dec: Update 15/16 Budget & Multi year projections• Enrolment, revenue & expenditures• Scenario options & targets

Dec: 15/16 Budget Kick-off • Announce 15/16 Target• Town hall presentation

Jan: Department Budget Building• Training workshops• Department review – Phase I• Targets Submitted/Entered

Feb/Mar: Budget Preparation • Review of budget/target submissions• Financial Resources Detailed Analysis• Review projections and plans• Preliminary Financial Results to F&I

April: 15/16 Final Draft Budget • Town hall presentation• Final Financial Results• Report Preparation

May/June: 15/16 Final Budget Report• Senate Review & Board Approval

Budget Target

Overview

• The structural deficit remains as expenses continue to outpace revenues.

• 15/16 will not be balanced with a 5% target.

• Similar level of cuts are expected in 16/17 & 17/18.

• Preliminary targets for 16/17 & 17/18 will be announced in early 2015.

• Final targets are subject to multi-year financial projections that are currently being finalized.

Multi-year Targets

• Vice-President`s (VPs) each have a 5% target.

• VPs will develop/identify any unit-wide financial strategies.

• VPs will set targets that may/may not be across-the-board (ATB).

• VPs will communicate specific department targets (by January 16).

• Plans will need to be submitted to VPs and Finance.

• Plans with staffing implications will be shared with HR.

• Target reductions may be entered centrally by Finance.

2015/16 Target Process

• Departments should rely on their scenario modelling plans to submit their targets plans/strategies.

• Targets can include expenditure reductions and/or revenue enhancements.

• Expenditure cuts need to be carefully monitored to ensure existing university revenues are not adversely impacted.

• Service reductions need to be reviewed carefully so impact to other areas/stakeholders is understood.

• Target strategies that have a net new revenue impact to the university will be considered.

2015/16 Target Strategy

• Revenue targets should not include recoveries (back-charges) from other departments.

• Identification of fees-for-service from external users should be explored.

• New fees from students must be reviewed with finance.

• One-time funds (e.g. departmental carry forwards) can be utilized to bridge to permanent base budget changes that will occur in later years.

• Carry forward deficits will not be allowed any longer unless short term & approved by the VP.

2015/16 Target Strategy

General Budget Information

Budget Types

Permanent (Base)• Funds that are rolled over into your budget every year • Millennium Codes: BD01 (Permanent Adopted Budget) ->Finance Use Only

BD02 (Permanent Budget Adjustment) -> BUDAs

One Time Only (OTO)• Funds that do not roll over into the next budget year• Funds should not be used to fund base needs• Millennium Codes: BD04 (Temporary Budget Adjustment)

Faculties/Admin Costs

The following are costs that Faculties/Admin Departments are responsible for managing within their operating budget:

• Salaries • Operating Supplies• Travel• Equipment & Furnishings

Central Costs

The following are some of the costs that Central is responsible for managing the budget:• Central Benefits

o Fringe Benefitso Retirement benefitso Tuition benefitso Post retirement benefits

• Salary increases as per Estimated future salary increases (ATB, Merit)

• Pension Costs

Benefit Percentages

When budgeting for position, benefit cost is to be included at the following %:

• Full Time: 21%• Part Time: 12%• Students/Stipends: 8%

The rate is determined by the account from which the individual is paid, not by the individual

Note: During the budget build, these percentages will be reviewed and are subject to change if required.

Ancillary Budgets

• Ancillary budgets are responsible for all increases

• Increases DO NOT come centrally (e.g. salary increases)

• Ancillary areas will also receive a budget target set by their respective VPs

Special Retirement Incentive Program

Special Retirement Incentive Program - NEW

Details:• Program for Faculty & Staff• 80 Factor, minimum Age 60• Approval linked to base budget savings or

efficiencies• Retirements July 2015 – July 2017

Special Retirement Incentive Program - NEW

• Incentive cost is funded by the department of the retiree.

• Replacement cost during year of the incentive to be paid by department receiving the replacement

• Ongoing replacement cost to be funded by savings from retirements on an on-going basis.

On the Academic side only …..• After Year 1, base budget for salary & benefits to be

removed from the originating department and re-allocated to the VPA retirement pool. The pool will be used to fund permanent replacement costs and fund on-going cuts.

Salary Budget Procedures

Costs & Funding Responsibilities

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Salary Budget Procedures

PURPOSE:

• There are many types of salary adjustments with varied budget implications that are currently being done.

• Inconsistent understanding of what the procedure is or who is responsible for the funding.

• Directives required to ensure decisions being made are informed with full appreciation of the budgetary financial implications.

Salary Budget Procedures

Underlying Funding Principle:

Generally speaking, the funding source should be dependent upon whether the salary adjustment is within the control of the unit.

If the decision is within the control of the unit, the unit is responsible for the funding

If the decision is not within the control of the unit, Central is responsible for the funding.

Reasonable exceptions may exist to this guideline.

Financial Resources and Human Resources will collectively review these exceptions in consultation with the VPs.

Review of Salary Adjustments(under the current budget model)

Salary Budget ProceduresFunding for WLUSA Positions

Salary Budget ProceduresFunding for Management & Non-Unionized Positions

Budget Process Overview

• 2014/15 base budget has been rolled into 2015/16.

• Phase I is now open for budget building.

Where are we now...

Entry into Millennium Deadline:

Feb 6, 2015

Budget Steps

I. Complete Budget Target Planning Document

II. Review of Current Budgetsa) Review position budgets and make BUDA adjustments

if necessary (zero impact)

b) Review remaining accounts and make BUDA adjustments if necessary (zero impact)

III. Enter Budget Targets into Millennium

I. Budget Target Planning Document

II. Budget Target Planning

DocumentUse Scenario Planning Document for source information

Enter information into Target Planning Document

Enter information into Millennium

Submit Budget Target Planning Document to VP/Financial Resources

II. Budget Target Planning

Document

Working Document for Budget Managers to submit for VP /Finance Resources

Enter assigned target from VP

Select from pre-established

DEV CATs in Millennium.

II. Budget Target Planning

Document

Must be completed for all Position Related

DEV CATs

II. Budget Target Planning

Document• Position#/Position ID must entered for all

“position related” Development Categories.

• # of Stipends must be entered if the reduction is in account 600200 (WLUFA CAS-Teaching Salary)

• Document to be submitted no later than Feb 6 to respective VP and Budget Office (Sandra Davidson)

• If target details are significantly different than original planning scenarios, discussions with VPs should happen as soon as possible.

II. Review of Current Budgets

a) Position Budgetso Essential to review position budgets for Faculty, WLUSA,

MGMT, EXEMPTo Using “Current Year – Budget by Position”:o Verify existing employee positions; add missing

employee positions; reverse incorrect employee positions

Balance in unallocated salary account (630999) cannot be negative

II. Review of Current Budgets

b) Non-Position Budgetso Review all remaining budget accounts and adjust if

necessary

A Budget Adjustment is called a BUDA

A BUDA moves budget funds from one budget line to another (ex. Office supplies to Training)

These entries MUST balance to zero!

II. Review of Current Budgets

BUDA Numbering SystemPurpose:• To understand the entire budget adjustment for

analytical purposes (the debit & the credit)• To be able to explain the changes in the various

Orgn due to the BUDAsProcess:• Add requester’s full initial’s + numerical sequence

in the “Additional Info” field for each BUDA • Additional Info is now a mandatory entry field

e.g. SAD001: Inc training due to new requirements

II. Review of Current Budgets

Description Dev Cat Description

Budget Adjustments

BUDA Moving funds between accounts and/or departments; adding in additional revenue with offsetting expenses

Notes:• Confirm that the BUDA numbering system was used• These entries MUST balance to zero!

Budget AdjustmentsDev Categories

III. Enter Budget Targets into Millennium

• Entry into Millennium is the final step

• Use the completed “Budget Target Planning Document” for input purposes

• Budget Targets will be entered into Millennium using “Dev Codes” to categorize how the targets were achieved

• Reduction in expenses and increases in revenue will contribute to the overall budget target

• Financial Resources will confirm that the overall target has been achieved by VP responsibility area

III. Enter Budget Targets into Millennium

Budget Targets cont. Dev Codes (Non-Position related)

Description Dev Code Description

Net New Revenue - Rate

REV1 Increased revenue due to an increase in rate.

Net New Revenue - Volume

VOLM1 Increased revenue due to adjusting revenue with actual results and/or expected activity increase.

Reduction REDU1 This would include reducing discretionary costs without having a significant impact to current program/service levels.

Elimination ELIM1 This would involve the elimination of programs/services. Any revenue related to these programs/services must also be reduced to show the net budget impact.

Carryforward CFD Use of OTO Carryforward Funds

Budget Targets Dev Codes (Position related)

Description Dev Code Description

Retirement RET This code to be used for non-faculty units only.

Attrition ATT

Reduction of the size of a workforce by not replacing personnel lost through voluntary retirement or resignation

Redundancy PRED Positions declared redundant through a lack of work, reorganization of duties or a reduction of services.

Budget Targets Dev Codes (Position related)

Description Dev Code Description

Voluntary Reduction of Hours

RHRV This would include a voluntary reduction of hours temporarily or permanently, and on a weekly or annual basis. May include a shorter work year, shorter work week, or shorter work day.

Involuntary Reduction of Hours

RHRI This would include reducing hours from a full-time position to a part-time position; Unpaid time off (temporary layoff) during periods of low activity.

Funding through Carryforwards (OTO)

• One-time funds (Departmental Carryforwards) can be utilized to bridge to permanent base budget changes that will occur in later years.

• Carryforward deficits will not be allowed unless short term & approved by the VP.

• DEV code in Millennium: CFD

Note: If you are considering using Carryforwards this year for bridging, please contact Budget Office for data entry purposes.

• Millennium Training documentation will be available on the Financial Resources website under “Budget & Management Reporting”.

Need Training?

• One-on-One training is also available if required.

Help!

Sandra Davidson (x4987)

• Budget Target questions• Budget Target Planning Document assistance

Tara Zwep (x2795)

• General budget questions/assistance• One-on-One Millennium training• Millennium Budget navigation & module access

Ed Linder (x6451)

• Account/Org Set-up

NOTE: All budget presentations and documents will be available on the Financial Resources website under “Budget & Management Reporting”