finance initiative 2013 symposium october 22, 2013 1

Finance Initiative

2013 Symposium

October 22, 2013

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Finance: Agenda

• 40 Minute Presentation– Team– Problem Statement

• 20 Minutes for Feedback

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Finance: Team

• Colleges• Lucille Jordan, President NCC• Melanie Kirby, CFO NHTI

• System Office• Kelly Chapman• Steve Fader• Mike Marr• Ron Rioux• Kristyn Van Ostern

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Finance: Problem Statement

• The short term goal of this initiative is to make recommendations to improve CCSNH’s operating margin and improve our overall financial and budget processes

• The long term goal of this initiative is to work toward a sustainable financial model that allows CCSNH to hold tuition costs down

• One of four strategic initiatives that the Board of Trustees asked the Chancellor to focus on as part of the 2014 Strategic Plan

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Finance: Short Term Areas of Focus

• Outlining a new capital and operating budget process– Capital budget process will focus on enrollment trends

and growing program areas to guide investments– Operating budget process will outline incentives for

colleges to maximize operating margin

• Proposing a new financial reporting framework for the Board and SLT to improve transparency

• Earning a return from our treasury operations (cash)

• Cutting expenses in specific categories (utilities)

• Understanding which programs provide the highest operating margin returns

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Finance: Operating Budget Process

• Improve the CCSNH Operating Budget Process• FY2013 Operating Margin

– Colleges retain 75% in a reserve fund

– System retains 25% for Strategic Initiatives

• FY2014 Operating Margin Forward– Strategic Initiatives are included in each

college’s operating budget

– Colleges will establish a reserve fund

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Finance: Containing Costs and Earning a Return

• Purchasing Opportunities (Cost-Containment)– Utilities

– CCSNH Credit Card Program (PCards)

• Maximizing Revenue: Interest on Funds

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CCSNH Credit Cards-PCards

• Corporate credit card for purchasing– Streamline purchasing process

– Revenue opportunity for CCSNH

– Implementation• College Budget Process is key• NCC Pilot Program

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Finance: Financial Reporting

• FY13-Accrual Accounting in Banner Finance– Income Statement and Balance Sheet by

College

– Establishing key indicators• Operating Margin• Others?

• Department Budget Reports– Currently have over 300 automatic reports

• Modify to include payroll expenses• Implement Program Operating Margin Reports

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Finance: Program Comparison

• Program Operating Margin– Focusing on:

• Tuition Revenue generated by the program• Program Payroll/Direct Expenditures• CCSNH Internal Comparison Only

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Finance: Program Comparison

Case Study 1 - DRAFTTuition Revenue $ 2,321,753.00

Payroll Expenses $ 1,014,020.97 Direct Expenses $ 10,477.21 Total Expense $ 1,024,498.18

Operating Margin $ 1,297,254.82 Operating Margin % 56%

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Finance: Program Comparison

Case Study 2 DRAFTTuition Revenue $ 149,442.00

Payroll Expenses $ 169,395.63 Direct Expenses $ 6,759.09 Total Expense $ 176,154.72

Operating Margin $ (26,712.72)Operating Margin % -18%

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Finance: Longer Term Areas of Focus

• What should CCSNH’s revenue mix look like in 5 years? How do we compare to other institutions today? What will our financial model be in 5 years?

• Should we consider new pricing models, like charging a flat rate for a certain number of credits?

• What partnerships should we pursue to generate operating margin?

• What role should the Foundation play in our future business model?

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Finance: Feedback

Questions?

FinanceInit@ccsnh.edu

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