Lou Mitton Paola Morrone

Changes to budget Submission Drivers Strategic Mandate Agreement Funding Formula Review Budget Model Revenue Challenges Hyperion Planning Hyperion Reports

2

What’s driving the change ◦ Provincial initiatives Strategic Mandate Agreement Funding formula review ◦ Budget model ◦ Revenue challenges

Changes to the narrative templates ◦ Activity unit/support unit/ancillary ◦ NASM (space) and budget model drivers ◦ Variance template ◦ Budgeted positions ◦ Organization chart

3

Challenge of directing limited funding to the greatest priorities

What is Driving the Change?

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Alignment with provincial objectives Promote differentiation between universities Support accountability and sustainability Improve quality and outcomes for students

Strategic Mandate Agreement

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McMaster’s areas of institutional strength Research and innovation with high societal impact Experiential and/or technology-enabled learning Access, retention and success for underrepresented

groups (Aboriginal, first generation, students with disabilities)

Programs in growth areas (Health Sciences and the broad determinants of health, fostering robust societies, Business and Economics, Science and Engineering, Communications and Culture)

Collaboration/joint programs to support student mobility

Enrolment growth In effect until March 31, 2017

Strategic Mandate Agreement

6

Implications ◦ Future funding will be guided by provincial

priorities and dependent on fulfilling commitments ◦ Increased reporting requirements

Budget Committee decisions will be based on what each envelope is doing to contribute to achievement of SMA objectives

Strategic Mandate Agreement

7

MTCU principles ◦ Enhance quality and improve student experience May replace current performance funding ◦ Support the existing differentiation process Potentially multiple formulas for different universities ◦ Financial sustainability Address concern about demographic decline ◦ Increased transparency and accountability Greater data requirements

Funding Formula Review

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Timelines ◦ Review announced in March 2015 ◦ Consultation with stakeholders is complete ◦ Report to the province is underway ◦ New Deputy Minister Sheldon Levy starts December

1 ◦ Detailed design phase expected to start early in

2016 ◦ Implementation may coincide with expiry of SMA in

2017

Funding Formula Review

9

Implications ◦ Uncertain and possibly disruptive outcome if there

are winners and losers Budget Committee will be evaluating budget

submissions on sustainability in the event of an unfavourable impact on revenue

Funding Formula Review

10

Overview ◦ All central revenue is allocated to activity units

(Faculties) ◦ Support unit allocations are deducted from the

activity unit revenue based on drivers, which reflect usage

Principles include: ◦ Promote transparency, trust and engagement ◦ Assure financial responsibility, accountability and

fairness ◦ Advance the efficient use of physical and human

resources

Budget Model

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Implications ◦ All changes in revenue impact Faculty allocations ◦ Greater effort to control costs, especially space ◦ Faculties want to ensure they get value for their

contribution to support units Budget Committee will look at cost drivers,

service levels, and fees for service to determine impacts across the University

Budget Model

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Demographic decline ◦ Expected to reach 89% of 2013 level in 2021 ◦ Will not recover until 2034

89

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

Projected population decline:18-20 year old Ontarians, Indexed: 2013=100

Ministry of Finance Population Projections

Revenue Challenges

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Implications ◦ Total revenue available will drop with enrolment ◦ Greater competition amongst universities for a

shrinking pool of students Budget Committee will monitor trends in

enrolment, staffing and other benchmarks to make informed decisions about allocations

Revenue Challenges

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Objective ◦ To provide information about each envelope’s

operations related to current strategic challenges outlined above

Changes to the narrative templates

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Provides information specific to each type of envelope ◦ Activity units (Faculties) Faculty and student ratios Enrolment trends ◦ Support units Base services and internal fees Cost drivers ◦ Ancillaries Competitive position

Different Narrative Templates

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Provides information on trends ◦ NASM (net assignable square meters) Utilization of limited resource Potential source of efficiencies ◦ Budget model drivers (support units only) Indicator of cost pressures

NASM and budget model drivers

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Provides a high-level summary of major changes to each envelope’s operation ◦ Standardized ◦ Focuses on significant items (> $100K and 10%)

Variance Template

Variance Template

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Provides the trend in steady state employee levels ◦ Shows the impact of decisions made to cope with

changes in demand and revenue constraints ◦ Impact of holding positions vacant is removed

Budgeted Positions

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Provides an understanding of the scope of the envelope’s operations

Organization Chart

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PeopleSoft GL

PeopleSoft Pay Roll

PeopleSoft HR

Hyperion

How does Hyperion Planning fit within MOSAIC?

Hyperion Receives Salary

Expense Actuals from GL Monthly

Hyperion Receives Employee

Master Data from HR twice

a year Hyperion Receives

Salaries from Payroll

When GL & PR don’t match

there’s a HEDGE

Hyperion Sends FINAL 8 Month review & Budget to GL

•8 Month Review

•Enter Budget

•Finalize Budget

•Year End

•5 Month Review

•Budget is Finalized

May – June September – October

November – April April – May

How does Hyperion Planning fit within the Budgeting Process?

•8 Month Review

•Enter Budget

•Finalize Budget

•Year End

•5 Month Review

•Budget is Finalized

May – June September – October

November – April

April – May

Gen

erat

e Ex

pens

e Fo

reca

st

Load Actual by Account

Operating Expense

Original Budget / Projection

Surplus/Deficit Appropriations

Revenues Expenses

FOR

ECA

ST

Gen

erat

e Sa

lary

For

ecas

t

DETERMINE INCREASES

LOAD ACTUALS

FORECAST HOURS

SALARIES

HEDGE ACTUALS TO MATCH THE GL

BENEFITS FTE

Salaries Benefits

Stipends

Grade Emp. Group

Step

FOR

ECA

ST

COPY

EDIT ADJUST

BUDGET TO A NEW ACCOUNT Subm

it fo

r App

rova

l

Sa

ve

co

py

to

Ex

cel Fi

le

COMPARE

Adjust at Year or Month Levels

Spread monthly values equally or proportionally

Compare with Actuals

Add Supporting Details

Upda

te B

udge

t & F

orec

ast i

n H

yper

ion

The BIG Picture

The BOTTOM Line Dri

ll D

own

Hav

e a

ques

tion?

– W

e ha

ve a

re

port

for t

hat!

Web Based Report: ◦ YTD Actuals Balance

SmartView: ◦ 5 Month Review form ◦ Actuals By Employee by Account

Automatically Emailed at month end.

Dept Fund Program

5 Month Projection for Current Year

Original Budget for Current Year

YTD Actuals for Current Year

Fund Department Fiscal Year

VariAnce To Budget

Web Based Report: ◦ Monthly Variance

SmartView: ◦ Variance Drill Down Reports: Ancillaries Operating

Provides in‐month and year‐to‐date revenues and expenses with variances to budget and prior year actuals to allow monthly tracking.

Shows the YTD Actual and Budget balances for the current years, as well as variance columns.

Similar to old AM090 report

Double Click for Account Details

Expense Account Breakdown

Provides Previous year’s actuals, current year’s Original Budget, current Year’s projection and Variances.

Can view at high or detailed levels

Original Budget for Current Year

Current Year Projection

Variance

The BIG Picture The BOTTOM Line

Web Based: ◦ Statement of Operations

SmartView: ◦ J. 8 Month and Budget Review Report

Shows actual revenues and expenses by month, fund and program.

Can run for current or previous years. The budget for the year is shown and the balance

available in the remaining months to meet the budget.

Users can drill into the revenue or expense category down to the individual account level.

By Envelope or Individual Department BIG PICTURE: All Funds, All Programs, All Departments

BOTTOM LINE: Net Income

BOTTOM LINE: Net Income

BOTTOM LINE: FTE

Drill Down SmartView: ◦ Operating and Ancillary Drilldowns ◦ All Funds: Drilldown by Department Drilldown by Account Drilldown by Program

Drill Down to view the Distribution of Expenses amongst Departments

Budgeting Services Website: ◦ http://mcmaster.ca/bms/BMS_FS_Budgeting.htm

Hyperion Reports Catalogue and Guide: ◦ http://mcmaster.ca/bms/pdf/hyp_cat.pdf

Budgeting Services & Hyperion Team

Francois Joubert Chris Sylvester Iain Clarkson Lou Mitton Paola Morrone

joubert sylvest iclarks mittonl morronep

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