increasing the value of the budgeting process
DESCRIPTION
bbcon 2013TRANSCRIPT
10/7/2013 #bbcon 1
Increasing the Value of the Budgeting Process
10/7/2013 #bbcon 2
JENNY CHIU – VP FINANCE, LA YMCA
KATE MELVIN – DIR OF ACCOUNTING/ASST CONTROLLER,
INDIANA UNIVERSITY FOUNDATION
BRIAN WALKER – POWERPLAN/ADVANCED BUDGET
MANAGEMENT
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TWEET ABOUT YOUR SESSION
#BBCON
#FETRACK
# BDGFUN
@KT8IRD
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• Joined YMCA of Metropolitan Los Angeles
in January 2012 as Vice President of
Finance
• Prior to joining the Y, over 12+ years of
finance, accounting, operations and
management experience working in “for-
profit” sectors
• Graduated with B.S.E with concentration in
Finance and Accounting from the Wharton
School, University of Pennsylvania
GETTING TO KNOW YOUR PRESENTER,
JENNY CHIU. . .
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• OUR CAUSE
- The YMCA of Metropolitan Los Angeles is a volunteer-led non-profit
organization dedicated to strengthening communities through programs that
promote youth development, healthy living and social responsibility.
• OUR WIDE REACH
- The YMCA of Los Angeles has been making a positive impact in our
communities for over 130 years. Our 25 branches stretch across over 100
miles of Los Angeles County, from Antelope Valley to San Pedro. Our
membership community is 264,500 strong. Membership is open to all, with
financial assistance available to those who cannot afford it. This year, the LA
Y helped 1 out of 3 member families with financial assistance.
- We cannot do our work alone, extending our work with over 200 community
partners across the county, including schools, hospitals, clinics, cities and
other civic organizations.
YMCA OF METROPOLITAN LOS ANGELES
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BACKGROUND AND OVERVIEW:
WHO ARE WE & WHERE WE WERE
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• Association
- Non-profit organization in operation for over 130 years with annual
operating budget of $75 million
- 25 branches with a corporate support office
- Approximately 3,000 employees and 5,600 volunteers
- Historic culture of independent silo operations
• Accounting System
- Oracle based system for past 10 years until 2013
- General Ledger is now Financial Edge launched January 2013
- Budgeting Software is now Advanced Budget Management
(Powerplan) launched October 2012 (for budgeting 2013)
BACKGROUND
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BUDGET PROCESS
Association Budget
Summary: Branch
Summary: Departments
Specific Program Service
Research and Planning
• Bottom up (program level) budget approach which rolls into Association
- Oracle budget module: input monthly budget figures for revenue and
expense accounts on program level
• 25 branches each operating over 50 different programs (1,250 programs)
• Over 300 staff with fiscal management responsibilities
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300+ staff and 1,250+ programs:
• System limitation and lack of standardization
- All detailed budget work done outside of system on different
spreadsheets using different methodologies
• Time consuming
- Lots of preparation work required to gather historical and
researching historical information to build budgets
Association view:
• Association review process was challenging to fully understand all
the nuances of budget aside from comparison of figures to prior years
• Difficult to compare branch budgets across program areas
BUDGET CHALLENGES
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YEAR 2012 (YEAR OF CHANGE):
WHERE WE WANTED TO GO & WHAT WE DID
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• Operate as one Y
- Leverage knowledge and resources across Association to come up
with best practices for standardization
- Increase trust and transparency
• Empower and strengthen staff (program directors) in their fiscal
management skillset and help them connect their budget with our
cause
• Increase overview as an Association to identify bright spots and
opportunities to better serve our communities
OUR GOALS
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• Standardized “driver-based” revenue budget methodology for each
major program area to be utilized across Association
- Membership
- Childcare
- Other Programs
- Financial Development
• Collaborative implementation
- Project managed by Accounting dept with mindset of avoiding
TOP DOWN approach
- Involvement of key staff from various branches in “driver-based”
budget template development
- Involvement of TRAINING and IT depts
ROLLING OUT NEW APPROACH (NEW
SYSTEM)
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Membership:
• Group consisting of select branch Membership Directors along with
Accounting, Training and IT
BUDGET TEMPLATE DEVELOPMENT
1. Compiled and discussed various
budget models used across
Association
2. Consensus on proposal of
standardized model
3. IT supported in extracting data
where needed
4. Accounting created excel template
of model
5. Membership Directors tested and
provided feedback
6. Repeated steps 3-5 until satisfied
7. Training material created and
trainings led by staff
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BUDGET TEMPLATE DEVELOPMENT
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Outcomes:
• Developed robust driver-based membership model using drivers
that speak to staff (Ex: Enrollments, Cancellations, Total Units)
and also provides easy access to historical information
• Time intensive process but ultimately through this collaborative
approach, able to get buy-in and support of all Membership
Directors in using these drivers since it was developed by fellow
peers who understood their perspective
• Excel “driver-based” template
- Requires more complicated formulas
- Need to thoroughly test all formulas for accuracy
- Need to protect cells where formulas exist
- If updates made, difficult to ensure all staff are using the correct
template version
- Challenge for higher level overview / aggregation
BUDGET TEMPLATE DEVELOPMENT
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ADVANCED BUDGET MANAGEMENT (ABM)
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ADVANCED BUDGET MANAGEMENT (ABM)
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YEAR 2013:
WHERE WE ARE NOW
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Training & Development:
• Webinar trainings throughout the year based on relevancy
- Jan - Mar: Variance reporting – how to view performance and research &
document variances compared to budget and prior year
- Apr - Jun: Forecasting reiterating purpose and “driver-based” methodology
- Aug - Sep: Budgeting reiterating purpose and “driver-based” methodology
Feedback & Improvements:
• Refined reports to be more effective for branch use or association use
• Identified areas that need further training and clarification for new year
Top Management Support:
• Supportive of changes in reports and new processes
JANUARY – SEPTEMBER 2013
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Outcomes:
• Budget process
- Good foundation of standardized “driver-based” budget methodology in
creating more detailed, well thought out budgets by staff
- More efficient and transparent budget process and reporting with new
system ABM that provides easy access to information and aggregates
automatically
• Association overview
- All branches and corporate office speak same budget language and use
same tools
- Can better compare branches via reports with detail level to identify bright
spots and opportunities, ex. Membership Trends
• Culture
- Shift towards increased teamwork and open collaboration. Approach in
implementation which involved branch and corporate staff set example of
possibilities when we work together.
JANUARY – SEPTEMBER 2013
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Increasing the Value of the Budgeting Process
PRESENTED BY CATHERINE “KATE” MELVIN
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• Indiana University Foundation
• Director of Accounting/Assistant Controller
• Bloomington, Indiana
• Working Budget since 1999
• Personnel & Program Budget Focus
• Annual Operating Budget of $27 Million
• Approximately 200 Employees
• General Ledger – Financial Edge
(Blackbaud)
• Budgeting Software – Advanced Budget
Management (PowerPlan)
GETTING TO KNOW YOUR PRESENTER,
CATHERINE “KATE” MELVIN . . .
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EVOLUTION OF THE BUDGET PROCESS
Upgrading
Technology
Changing Approach
Moving Forward
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TECHNICAL SOLUTION
ROUND 1 – “GEE, I MISS THOSE SPREADSHEETS”
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UPDATING TECHNOLOGY
Manual Budget Build
Top down process
Changes added globally
Months of budget work
Challenges
Budget was manually compiled
Analysis
across organization
Reports – not useful or timely
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Solution – Budget Development Tool
Online access for managers
Personnel budgeting
Access to updated, actual results
Value Added
Process ownership
Updated results across organization
Tools to manage funds more effectively
UPDATING TECHNOLOGY
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CHANGING OUR APPROACH
ROUND 2 – “YOU WANT US TO DO WHAT?”
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CHANGING APPROACH
Budget Preparation
Forecast of actual expenditures
Build budget for next fiscal year
Accounting consultations
Assessment
Templates completed for management review
New requests and budget cuts
Conferences with senior management
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Challenges
Compressed timeline
New levels of scrutiny
Confidence in the process
Impact
Strategic decision making
Information exchange
Improved reporting and analysis
CHANGING APPROACH
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MOVING FORWARD
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What’s Next?
FY2015 changes
Process updates
Rolling forecasts/Zero based budget?
Take Me Home
Education
Engagement
Energy
MOVING FORWARD
10/7/2013 #bbcon 32
THANK YOU FOR YOUR INTEREST!
HAVE A GREAT DAY!!
Education
Engagement
Energy