stanford hsf vision presentation

Hyperion Higher Ed User GroupA Comprehensive Planning and Reporting Model for Higher Education: Hyperion Strategic Finance

Andrew Harker, Ed. D Director of Budget Management, Stanford University

A Comprehensive Planning and Reporting Model for Higher Education: Hyperion Strategic Finance

Higher Ed Financial ManagementWhat are the challenges we are facing?An increasing desire to have continuous, comprehensive planning and reportingThe challenges/struggles of making (external) GAAP-based financial reporting mesh with (internal) fund accounting-based reportingThe systems we have/are putting in are not all that conducive to this type of reporting (for fund accounting, for higher education)Board/Senior management expectations sometimes dont align with our realityYahoo! and Cisco close their books and report in days, every monthDashboarding/KPI is easy and helpful in Corporate AmericaReports they are used to are simple: all money is greenReports should be straightforward and easy to comprehend


3 Broad ComponentsActual Revenues, Transfers, Expenditures, Assets, & Liabilities Coming from the General Ledger (legacy, Oracle, SAP, Banner, etc.)

Detailed BudgetComing from Hyperion Planning, Hyperion Pillar, Excel, etc.Most often only for Income Statement items (Revenue & Expense)

Long-Range ForecastingMultiple year, what-if scenarios, aggregated dataDone most often in ExcelUsually not integrated into other systemsIf multiple units are doing modeling, other units tend to be in the dark


Hodge-podge of financial information systemsControllers Office responsible for preparing the external GAAP-basis financial statements using a third-party consolidation toolUniversity Budget Office coordinates preparation of detailed fund accounting basis budgets in HyperionLong-Range modeling done in ExcelBy multiple units (Central, Med School, Business School)Totally disaggregated and disconnectedVariance Analysis and Reporting done as a separate process, in separate systemsIf tied together at all, nominally tied to detailed budgets only

What have we been working with at Stanford?


HospitalsLLCsSchool of MedicineGraduate School of BusinessContinuing Studies/ Summer SessionNon-formula Units (Provost GF Allocations)Auxiliary EnterprisesUniversityStanford Consolidated FinancialsUniversity Financial Structure


Consolidated Budget by Fund Type$ in millions


Sheet1

Auxiliary

ProjectedGeneralGrants && Svc Ctr

2004/05FundsDesignatedRestrictedContractsActivitiesTotal

2,716.6Total Revenues746.1456.2579.9905.9234.32,922.4

2,646.7Total Expenses626.4426.0490.5890.2390.02,823.1

Revenues less

69.9Expenses119.730.289.415.7(155.7)99.3

(27.6)Transfers(109.1)(23.8)(54.5)(15.7)153.0(50.1)

42.3Surplus/(Deficit)10.66.434.9(0.0)(2.7)49.2

Beginning Expendable Funds9.9387.6572.0(0.2)0.6969.9

Ending Expendable Funds20.5394.0606.9(0.2)(2.1)1,019.1

Sheet2

FY00FY01$ in millionsFY02FY03FY04FY05FY06

1,7441,882Total Revenues2,0082,0942,1812,2672,347

1,6081,753Total Expenses1,8671,9682,0712,1802,291

135129Net1411261108756

Sheet3

Statement of Activities to Consolidated Budget Crosswalk(in millions of dollars)


pledge

StatementAdjustmentsConsolidated

of ActivitiesReclassAccrual to CashTransfers & OtherBudget

Student Income$332$128$460

Sponsored Research Support924924

Health Care Services23018(4)244

Expendable Gifts in Support of Operations105(1)104

Investment Income477477

Special Program Fees and Other Income25912271

Net Assets Released from Restrictions46(3)43

Total Revenues2,3731460.042,523

Expenses

Salaries and Benefits1,429(2)101,437

Capital Equipment Expense5656

Depreciation197(197)0

Financial Aid128128

Other Expenses74018773838

Total Expenses2,366146(136)832,459

Revenues less Expenses$70.0$136$(79)$64

Transfers

Additions to Plant/Endowment Principal(43)(43)

Transfer of Equity from Hospital to Med School1414

Revenues less Expenses after Transfers$70.0$136$(108)$35

Bridging the GAAPStudent Financial Aidmoves geographically from expenditure to reduction from revenue (but only for tuition grants, not other types of Aid)Capital Asset Acquisition is a use of funds, but the Depreciation Charge is what hits the external Income StatementFringe Benefit Burden expenditure vs. external Benefits pool paymentsInternal Revenue/Expense and interfund transfers vs. the transfer that show in GAAP reportingDebt ServiceInternal allocation of principal amortization as expenditureRetirement of debt principal as Balance Sheet transactionGAAP Fund Types vs. Fund Accounting Fund Types

Financial data has to be manipulated (moved), aggregated, or disaggregated for different purposes


Whats so funny about Peace, Love, & Fund Accounting? ** With apologies to Elvis Costello and the AttractionsFASB Reporting (GAAP)URTRPRURGifts & End IncEnd PrincG&CFund Accounting


The FrustrationDifferent units maintain their own models separatelyNo common thread; no continuous feedback or updatingManual reconciliations between different viewsHow many times do we reinvent the wheel?What were we thinking? (What were we thinking!)With our hands full with Income Statement modeling, who has time for Balance Sheet modeling?The ERP systems we have do not facilitate this (no matter what the sales team says)

We have a disaggregated, discontinuous, disorganized overall process.


The DisconnectFinancial Actuals ConsolidationsDetailed Budgets entered by UnitsUnrestricted Funds ModelingEndowment Principal Growth ModelingCapital Planning/BudgetingTuition/Fees & Enrollment ForecastingDebt Service PlanningSponsored Activity ForecastingSchool submodels


Whats so funny about Peace, Love, & Fund Accounting? ** With apologies to Elvis Costello and the AttractionsFASB Reporting (GAAP)URTRPRURGifts & End IncEnd PrincG&CFund AccountingHow do you plan, model, and report on both views consistently, coherently, and meaningfully? And do it without building your own system?


What is the vision?


3 Broad ComponentsActual Revenues, Transfers, Expenditures, Assets, & Liabilities Coming from the General Ledger (legacy, Oracle, SAP, Banner, etc.)

Detailed BudgetComing from Hyperion Planning, Hyperion Pillar, Excel, etc.Most often only for Income Statement items (Revenue & Expense)

Long-Range ForecastingMultiple year, what-if scenarios, aggregated dataDone most often in ExcelUsually not integrated into other systemsIf multiple units are doing modeling, other units tend to be in the dark

Consolidation: Hyperion Financial ManagementBudgeting: Hyperion PlanningModeling: Hyperion Strategic Finance


HyperionStrategic FinanceHyperionFinancialManagementHyperionPlanningAutomatedDataIntegrationBetween the SystemsUsing Hyperion Tools to IntegrateDetailed BudgetingStrategic ModelingFinancial ReportingDistributed and Customizable Modeling; Real-time AccessDifferent Levels of Data Detail as Relevant to the Different Needs


TheCrosswalkExternalFinancialStatementsConsolidated BudgetA Continuous, Integrated ProcessFALLWINTERSPRINGSUMMERAs You Move Through the Fiscal Year, Your Comprehensive Model Gets UpdatedEach Offices Model Gets Data From and Pushes Data To the Other Models


HSF in Higher EducationScenario Comparison Early Forecast, Late Forecast, Budget, Projection, Actuals

What-If ModelingSide-by-side comparisonsSensitivity analysis

Models within modelsEndowment Principal growth modelFeeds Endowment Income ProjectionCapital Asset growth modelFeeds Debt Service/DepreciationNet Changes in AssetsFeed back to Balance SheetUsing the same framework, each school/unit can set up their own models, drivers, elements


Hyperion Strategic FinanceCreate financial models for each school or division in Hyperion Strategic Finance and consolidate them to a total for the university.


Hyperion Strategic FinanceModules can be created within each financial model to forecast financial statement items in detail.

The user can choose from a menu of standard forecasting methods or create customized drivers.


Hyperion Strategic FinanceReports can be created at varying levels of detail in each model.Reports can pull Actuals, Budgets, and Different Forecast datatogether for side-by-side comparison.


Hyperion Strategic FinanceReport across multiple schools or divisions and analyze individual drivers for each.Each double-click unveils an additional layer of detail.


Hyperion Strategic FinanceBalance Sheet items, such as Endowments, can be forecast as well.

HSF will automatically generate a Cash Flow Statement based on the Income Statement and Balance Sheet forecasts.


Hyperion Strategic FinanceModel components flow back and forth between the Balance Sheet and Income Statement.


Hyperion Strategic FinanceThe Scenario Manager provides the flexibility to store multiple sets of assumptions for analysis.


Hyperion Strategic FinanceReport the results or the financial impact of each scenario, or any combination of scenarios.


Whats In It For Us?Higher Education strategic planning needs and demands are becoming more complex But the tools we relied on previously dont always adapt well

FASB and GASB reporting requirements are very different from the way institutions really are managed

Buy vs. Build has often times turned into Buy and BuildERP system implementations like Oracle and SAP have to be customized up the wazoo, making day-to-day maintenance and upgrades a royal painThis model involves configuration only for higher education, rather than code rewriting or front-end plug-ins

Hyperions focus is on Business Intelligence analysis, modeling, and reporting


Questions, Discussion, Jokes


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stanford hsf vision presentation

Documents

hyperion planning

reporting model

darka comprehensive

type of reporting

hyperion pillar

financial reporting

fund type

systemsif multiple units