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FY 2011-13Budget Development and NC IBIS

The Office of State Budget and ManagementAugust 3, 2010

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Welcome and Introductions Implementation Update Budget Instructions Q & A Closing Remarks

Agenda

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Welcome

What are the drivers behind the new budget system and process changes?• New budgeting direction mandated by the Governor• Existing mainframe budget systems are over 30 years old

and can not meet new needs and expectations

Unprecedented fiscal challenge we all face together

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Introductions

OSBM Steering Committee• David Brown, Deputy for Budget• Jonathan Womer, Deputy for Management• Joel Sigmon, ASBO for Technology & Data Services• Pam Kilpatrick, ASBO for HHS

OSBM Project Team• Mercidee Benton, Associate State Budget Officer for Transportation• Agness Gunter, Lead Mainframe Systems Developer• Trevor Minor, Strategic Management Analyst• Francine Stephenson, Sr. Data Analyst/Oracle Developer• Kathleen Crawford, ITS Project Manager

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Introductions

Agency User Group• Donna Barnes, Commerce• Shari Bryant, DHHS-DCD• Anne Godwin, OSC• Doug Lewis, DENR• Kim Padfield, DOT• Rose Page, DPI• Jim Slate, DHHS• Rex Whaley, AOC

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Introductions

Deloitte Team Introductions

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Implementation Update

Implementation Update from Deloitte

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Budget Instructions

Outline for Budget Instructions Discussion 1. Introduction/Overview (David Brown) 2. What’s New (David Brown) 3. What’s Due (David Brown) 4. Strategic Planning (Jonathan Womer) 5. Program Budgeting (Jonathan Womer) 6. Continuation Budgeting (Pam Kilpatrick) 7. Change Budget Requests (Pam Kilpatrick) 8. Information Technology (David Brown) 9. Capital (David Brown)

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Introduction/Overview

Introduction/Overview (Budget Instructions Section 1) New direction in budgeting

• Instructions reflect vision for new budgeting direction mandated by the Governor

• Process changes place greater emphasis on programs and results

Core process improvements• OSBM established workgroups to develop recommendations for

process improvements in core business areas• Results of workgroups reflected throughout instructions

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Introduction/Overview

Highlights and What’s New (Budget Instructions Section 2) NC IBIS implementation Creation of Worksheet 1/Base Continuation Budget and revised Worksheet

II/Change Budget process No inflationary increases in WSI/Base Continuation Budget Expansion and reduction requests Capital Improvement Plan and Budget Direction of Budgeting as Mandated by the Governor Program Budget Structure Strategic Planning Data Budget development schedule Additonal Budget Instructions to be issued

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Schedule

What’s Due (Budget Instructions Section 3) Key Dates:

• August 16 - Preliminary WSI/Base Continuation Budgets available

• September 2 - Additional budget instructions issued• September 9 – Statewide meeting• September 13-30 – Agency training on new WSII/Change

Budget, WSIII, and program data form• September 15 - 2011-13 WSI/Base Continuation Budgets due to

OSBM. No budget revisions will be copied into BPS after this date.

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Schedule

Key Dates:• October 1 – New WSII/Change Budget, WSIII and

program data form available to agencies• October 4-13 – Reconciliation of WSI/Base

Continuation Budgets as presented in program format• October 29 – WSII/Change Budget reductions, WS III

Capital requests, and Program Data due• November 1 – Strategic planning forms available• November 12 - WSII Change Budget requests for

certain continuation adjustments and expansions due

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Schedule

Key Dates:• November 14 – Block grant plans and recommended

special provisions due; IT expansion items due to ITS and OSBM

• December 15 – Strategic planning forms due• December – Governor’s staff reviews budget

recommendations• February 2011 - Governor’s recommended budget is

published

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Strategic Planning

How are the strategic planning requirements in Executive Order 3 being implemented?

What are the strategic planning requirements for 2011-13 budget development?

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Strategic Planning

How are the strategic planning requirements in Executive Order 3 being implemented?• Memo and guidelines issued March 2010:

– Directed agencies subject to Executive Order 3 to submit complete strategic plans to OSBM and the Governor’s Policy Office by October 29, 2010

– Provided general guidance and a suggested template for completing plans

– Identified standard goals and measures for management functions for agencies to incorporate

– Plans should be submitted in electronic format to their budget analyst and Trevor Minor (trevor.minor@osbm.nc.gov)

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Strategic Planning What are the strategic planning requirements for 2011-13

budget development?(Budget Instructions Section 4)4.2 Strategic Planning Elements

– All agencies required to provide elements previously collected for Results Based Budgeting (RBB):

• Mission• Goals• Key Agency Indicators (additional descriptive information will be required for

all measures)– Agencies subject to EO3 also required to report:

• Detailed objectives for each goal• Data for management goals/measures

Information will be submitted in IBIS; more detailed instructions and training will be provided at a future date

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Program Budgeting

What is program budgeting? How will programs be used for 2011-13 budget

development? What information will be collected about programs?

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Program Budgeting

What is program budgeting?• Builds upon RBB efforts to transition toward a budget process that

focuses more on programs and results• Process for building budgets based on programmatic need and

impact • Establishes structure that better aligns agency budgets with

programs• Program structure will be used in the future for:

– Analyzing budget requests and impact on programs– Tracking planning and performance information – Conducting periodic reviews of programs

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Program Budgeting

How will programs be used for 2011-13 budget development?• OSBM has worked with agencies to develop an inventory of all

programs and to more closely align those programs with the traditional budget structure

• Programs will be the basis for submitting change requests (discussed later in this presentation)

• Standard information will be collected on each program to support analysis and for use in budget publications

• Builds upon information previously collected for RBB

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Program Budgeting What information will be collected about programs?

(Budget Instructions Section 5) 5.2 Program Budgeting Elements

– Program Overview Information • Required for all programs for 2011-13 budget development• Program contact, description, customers and key topic area

– Program Performance Information • Optional for 2011-13 budget development; required at future date• Program goals, measures, questions about performance

– Additional Program Details • Optional for 2011-13 budget development; required at future date• Series of questions designed to capture more specific details about the program

and how it operatesInformation will be collected in IBIS; more detailed instructions and training will be provided at a future date

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Continuation Budget

What is continuation budgeting? How will the continuation budget be different? What are the benefits of new process? What are the steps for developing Worksheet I?

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Continuation Budget

What is continuation budgeting? • Budget to continue government “as is”• Extension of the current year authorized budget with

adjustments• Budget before priorities, new policies, significant

changes

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Continuation Budget

How will the continuation budget be different?• Only limited increases will be included in Worksheet I to

generate a 2011-13 base continuation budget:– Nonrecurring items removed/restored– Annualization of partially funded items– Technical adjustments/corrections

• Worksheet I will be developed in BPS and data will be uploaded to IBIS

• Worksheet I will be connected to the program inventory and budget crosswalks to relate established fund structure to programs

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Continuation Budget

How will the continuation budget be different? (Continued)• All other adjustments to continuation will be requested

through IBIS in the Worksheet II/Change Budget process (discussed later in this presentation)

• Changes will still be categorized as continuation or expansion through change budget process

• Supporting forms (previous schedules) may be submitted on an optional basis

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Continuation Budget

What are the benefits of the new process? • Creates a true base from which all change is considered• Allows all changes to be considered in the context of the

whole• Creates transparency and better understanding in how

budgets are recommended for change• Reduces the time for developing the baseline, allowing

more time to justify and analyze changes based on program need and impact

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Continuation Budget

What are the steps for developing Worksheet I? (Budget Instructions Section 6) 6.1 Worksheet I Overview

– Accessing Worksheet I via XTND (August 16 and after)– Budget Codes for which WSI are prepared are governmental or proprietary

codes identified by OSBM (list on OSBM website)– Format of the WSI is unchanged

6.2 Worksheet I/Base Continuation Budget – Analyzing, Adjusting the Certified and Authorized Budgets (606s)– Requests for Increases/Decreases in the Base Continuation Budget are

BPS Entries

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Continuation Budget

What are the steps for developing Worksheet I? (Continued)6.2 Worksheet I/Base Continuation Budget - Continued

– Allowable Base Continuation Budget Adjustments - annualize programs, adjust for NR items, technical adjustments

– Continuation Budget Salary and Fringe Benefits– Reconciliation of Salaries and Position Counts

6.3 Final Submission of Worksheet I

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Change Budget

What is the change budget? Why is there a new process? How is this different from current process? What are the steps for developing Worksheet II?

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Change Budget

What is the change budget?It is the agency request for:

– Expansion of existing programs, new programs, and/or pilot programs– Department proposals to change a statutorily controlled program by

redirecting funds from one program to another– One-time major equipment purchases– Continued phase in or new programs initiated in the previous biennium– Funds to replace lost federal funds– Additional operating funds above those allowed in the base continuation

budget, such as inflationary adjustments and other items previously included in the Worksheet I

– Budget reductions

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Change Budget

Why is there a new process?• All requests for increases to the budget to be considered

in context of the whole• One single prioritized agency request for expansion and

continuation increases• Change requests related to programs and justification

based on program need and impact• Enhanced justification and review of change requests

from agencies• Improved budget results

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Change Budget

How is this different from current process?• All change requests will be made by program/subprogram as

identified in the program inventory crosswalk (except for Department-wide requests or new programs)

• Data will be submitted via web forms• Workflow for agencies and OSBM throughout the process• Some information will be pre-populated throughout the process

reducing requirements for manual entry by agency staff

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Change Budget

How is this different from current process? (Continued)• All change requests will be classified by type, allowing for

enhanced analytics and reporting capabilities• Summary information for change requests will be available for

viewing online or printing– Continuation only– Expansion only– Reduction scenarios

• Reduction options will be submitted via Worksheet II• Adjustments to the continuation budget will not be updated to the

Worksheet I

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Change Budget

What are the steps for developing Worksheet II? (Budget Instructions Section 7) 7.1 Overview of WSII/Change Budget Forms

– Change budgets are related to programs– Traditional budget information captured as well as additional program data

elements– More detailed instructions and training will be provided at a future date

7.2 Prioritization– Continuation and expansion budget increases will be submitted via IBIS in

a single prioritized request by the agency

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Change Budget

What are the steps for developing Worksheet II? (Continued)7.3 Continuation Budget Adjustments

– The following items must be classified by the agency as continuation budget requests:

• Enrollment and populations served• Statutorily established salary increases

– Optionally, the agency may request adjustments for items previously allowed in Worksheet I, such as:

• clothing, textbooks, educational supplies for K-12 schools• building/lease adjustments, • vehicle replacement, • inflationary adjustments,• operating reserves.

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Change Budget

What are the steps for developing Worksheet II? (Continued)7.4 Expansion Budgets

– Extremely limited funding for expansion items– Expansion of programs from 100% receipts must be requested– Expansions involving IT projects have unique requirements (see Section 8)

7.5 Reduction Options– Strategies should include eliminating duplication, under performing

programs, reduced administrative cost, service efficienciesAdditional guidance will be forthcoming during budget preparation process

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Information Technology

What is required for information technology requests? (Budget Instructions Section 8)

• Process will be the same as in the previous biennium, except the Worksheet II/Change Budget will be completed in IBIS

• All IT expenditures exceeding $100,000 in total requirements, regardless of funding source, for which funds have not been appropriated, shall be submitted to both ITS (PPM tool) and OSBM (Worksheet II/Change Budget in IBIS)

• For further information on submitting requests in the PPM tool, refer to the 2011-12 IT Expansion Budget Request Instructions.

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Capital Budget

How will the capital budget process be different? (Budget Instructions Section 9)

• Capital budget will be part of the integrated budget system:– All capital requests submitted to OSBM in IBIS– Projects will be tracked and reported by project and funding source– New reporting capabilities will be available– Six-year CIP and capital budget produced from IBIS

• More detailed instructions and training will be provided at a future date

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Questions?