Clarify UCOP budget presentation

Current Status  Updated May 2017

CSA due date is April 2019

Initiated

Analysis Underway

Partially Implemented

Fully Implemented

Fully Implemented CSA Confirmed

Project Goals

To develop and implement a revised UCOP budget presentation that complies with the California State Auditor’s (CSA) recommendations (as indicated by figure 11 of their audit report). The updated budget presentation will incorporate improved use of actual and forecasted expenditures.

Additionally, the budget presentation will include all expenditures and reporting on all expenditures showing changes to the discretionary and restricted reserve balances. Lastly, the budget presentation will be consolidated into one budget presentation to include Permanent (termed “disclosed” by CSA) and One-Time Temporary (termed “undisclosed” by CSA) budgets.

Plan Assumptions

  • UCOP can report on actual expenditures versus budget, leveraging the current system and support provided by UCLA.
  • Changes to the general ledger and other associated financial systems will not interrupt reporting capabilities.
  • UCOP can implement improved forecasting tools and discipline to update projected in-year costs throughout the year, which can be used to improve budgets.
  • UCOP can provide visibility into One-Time Temporary budgets showing commitments against the reserve balance.
  • UCOP will leverage industry best practices (GFOA, NACUBO) in establishing the new format.
  • When implementing best practices, UCOP will work with key stakeholders and the Regents to determine the appropriate format and level of detail for Regents’ oversight.
  • Successful and timely outcomes of this workstream are dependent on the UCOP Budget & Finance department’s ability to have sufficient and appropriate time and resources required to implement new policies, procedures, systems, and tools.
  • Fully successful and timely outcomes of this workstream are dependent on the replacement of the UCOP budget tool, BDS, with a more sophisticated tool. Replacement is required to fully achieve the desired outcomes, as BDS functionality is limited in key areas and requires significant manual manipulation of data. This significantly and negatively impacts staff productivity.

CSA Reporting Requirements and Milestones

By April 2018

Implement our recommended budget presentation shown in figure 11. Specifically, the Office of the President’s budget presentation to the regents should include a comparison of its proposed budget to its actual expenditures for the previous year. It should also include all its expenditures and identify changes to the discretionary and restricted reserves. The Office of the President should combine both the disclosed and undisclosed budget into one budget presentation.

By April 2019

Continue to present a comprehensive budget based on the presentation in Figure 11 to the regents, the Legislature, and the public.

Workstream Milestones (preliminary)

1. Complete stakeholder analysis and form working group July 2017
2. Review budget-to-actual results for FYE 2016-17. Complete variance analysis to explain and understand spend by division, department and expense category Sep 2017
3. Complete an assessment of current best practices used in comparable university settings for financial reporting. Evaluate applicability at UCOP and develop recommendation detailing guidelines for operating budgets, contingencies/flexible budgets and the like. Oct 2017
4. Define pass-through, systemwide initiative and "fee-for-service" items in preparation for the new budget format. Discuss within UCOP key stakeholders to get input. Nov 2017
5. Complete a mid-year forecast review to evaluate year-to-date performance and update the full-year forecast. Report material changes to all appropriate stakeholders. Jan 2018
6. Present revised budget format to key internal finance stakeholders for approval
  1. Report all budgeted expenses including both the Permanent (“disclosed”) and One-Time Temporary (“undisclosed”) budgets to ensure transparency of total expenditures to appropriate stakeholders.
  2. Separately display Other Expenditures including funds that are Pass-Through amounts from restricted sources as well as Administrative Services (fee-for-service charges) that are in addition to Operating budgets.
  3. Detail UCOP Central & Administrative Services and Systemwide Academic and Public Service Programs
  4. Include all budgetary allocations from Permanent and Temporary budget.
  5. Provide actuals, forecasts and proposed budgets in presentation, leveraging actuals and forecasts to determine budget amounts.
  6. Provide detail and transparency to UCOP reserve calculations and requirements.
  7. Provide transparency of the proposed project funding for the budget year.
Feb 2018
7. Upon completion of Step 7, present revised budget format for President’s review and approval. Feb 2018
8. Present President’s approved budget format to campus stakeholders for input and to incorporate changes (VCBPs, others). Mar 2018
9. Gain acceptance of on-going budget reporting and presentation requirements from the appropriate representatives of the UC Regents (Finance and Capital Strategies Committee of the Board of Regents) Apr 2018
10. New version of budget presentation for Regents presented at the May 2018 Regents meeting. May 2018
11. Annually review budget presentations and update accordingly to continue to maintain best-practices, ensuring consistency of reporting from year-to-year to improve transparency and alignment with best practices. Dec 2018
12. Continue to present comprehensive budget and enable easy access to reporting of approved budgets for Regents, the Legislature and the public. Apr 2019