Transcript Presentation to New Chairs, Heads, and Directors

Presentation to
Provost’s Department Chairs
Leadership Program
Suzanne Bardouche
November 29, 2007
Fiscal Management from
the Departmental Point of View
Fiscal Management
Responsibilities
Day – to – Day
Accounting (especially, fund accounting)
Payroll
Management, Oversight and Planning
Budgeting (planning)
Management information
What is the
Chair’s Role
in Fiscal Management?
Fund Accounting
Fund = the “flavor” of money
What kind of money is this? Where did
the funds come from?
Examples:
1856 (U of M Foundation)
1043 (indirect cost recovery)
Fund Accounting
Applies to all funds, both sponsored and
non-sponsored
Common practice for public organizations
with multiple funding sources
Current accounting system and structure
is CUFS
July 2008 U of M will use PeopleSoft
Financials
Words of Advice
from a Seasoned Chair
“When I was chair (and I think dinosaurs roamed
the earth) there were two things about budgets
that I found essential:
There were numerous sources of revenue and you
needed to have an accounting for all of them or
else you would panic, and
I needed a single sheet summary of revenues and
expenses to avoid getting lost in the details and
understand if we had problems or not.”
Department of Alchemy
Fiscal Year 2007 (2006-07)
Annual Overview of Non-Sponsored Funds
fund type
1003
1043
1198
1856
1898
totals
RESOURCES
carryforward from previous year
$
22,000
$
(500) $
14,000
$
27,000
$
80,000
$
142,500
state support (central allocation)
transfers in
various donated funds
Donald Trump endowment earnings
sales of created metals
student lab fees, other misc.
ICR allocation
TOTAL resources received during fiscal year
$
$
$
$
950,000
75,000
-
$
$
$
$
-
13,000
28,000
41,000
$
$
$
$
63,000
-
$
$
$
$
165,000
$
$
$
$
950,000
75,000
63,000
165,000
12,000
12,000
$
$
$
$
$
$
$
$
$
$
$
1,025,000
$
$
$
$
$
$
63,000
$
$
$
165,000
$
11,500
$
55,000
$
90,000
$
245,000
$
28,000
$
12,000
$ 1,306,000
$
$ 1,448,500
Total + carryforward
$
1,047,000
$
$
$
$
$
$
$
$
600,000
180,000
75,000
35,000
65,000
18,000
25,000
7,000
7,000
4,000
4,000
3,000
1,023,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
4,000
900
2,500
3,000
10,400
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,000
33,000
6,500
40,500
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
32,000
45,000
77,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
75,000
22,000
28,000
14,000
20,000
6,000
42,000
8,000
16,000
231,000
$
675,000
$
202,000
$
103,000
$
49,000
$
89,000
$
24,900
$
32,000
$
26,000
$
42,000
$
78,000
$
15,000
$
32,000
$
7,000
$
4,000
$
3,000
$ 1,381,900
$
$
$
$
$
$
$
24,000
$
1,100
$
14,500
$
13,000
$
14,000
USES
academic salaries
academic fringe
grad assistant salaries
grad assistant fringe
staff salaries
staff fringe
student aid
office supplies, phone, copying
alchemy lab remodeling
base metals purchases
travel
computers and software
lab equipment
space rental & other misc.
transfers out
TOTAL USES
BALANCE
$
66,600
$ 1,142,900 83%
$
239,000 17%
“It's very helpful to have a good overall sense of
the budget so that you can plan strategically for
big and little things - i.e., I use budget meetings
with our accountant not just to check that
account balances are as expected (that's the
quick part) but also to get a better sense of how
we historically have spent money and do
projections for the future.”
Donated Funds
Demand
Quasi-endowment
Endowment
Spending is through CUFS
Chair’s role in oversight and
stewardship
“You need transparent and fair fiscal
procedures with faculty so that they
understand why they can/cannot have
funds for what they have requested.”
Why should you present financial
information to your faculty?
To dispel myths that you (or the dean)
have money stashed in a closet
somewhere and the possibilities are
endless if only that stash were released
To provide an accurate foundation for
discussions about the future directions of
the department
“A yearly budget and planning document,
whether required or not, is essential.
It needs to be a consultative document
with buy in from faculty and staff.”
“Vision without resources is a hallucination.”
--Bob Bruininks
“Perhaps the first job of leadership is to help
people face reality.”
--Al Sullivan
Grants Management
Role of Department Head
Oversight from proposal stage
through closeout
Role of Certified Approvers
“One of the critical items is establishing a
good relationship with the college budget
officer and staff.
Chairs who work to get to know the
rules and the general approach of the
CFO will be in a much better
situation to work collaboratively.”
What to Expect from Your Financial
Staff
Regular reports on the status of
departmental finances
Organized, systematic record keeping and
tracking of commitments
Projections for the next fiscal year
Preparation of annual budget in the spring
for the next fiscal year
Assistance with locating and interpreting
policies
Knowledge of all departmental revenues
and expenditures
Pro-active approach in bringing issues to
your attention
Service orientation
“Once a month going through all accounts
with the accountant or budget person
works for me, and results in few
surprises.”
“Develop a good, working
relationship with both your
collegiate CFO and your
departmental accounting
contact. This is critical.”
What your financial staff (including your
college’s CFO) would like from you
Understanding that your role as head
involves financial oversight
Time to review reports and discuss areas
of concern with you
Sense of overall direction and priorities for
the department
Attention to budgetary concerns
A good working relationship, with trust and
respect in both directions.
Support and leadership for solid financial
management principles, such as
– Separation of duties
– Written authorization and documentation
– Adequate justification for expenditures (who,
what, when, where, why)
“I'm glad you asked because we recently had a
case of fraud in the department.
The best advice is: Ask questions, lots of them,
and be sure, absolutely sure, you understand.”
“If you suspect that you've been told something
must be done in a particular way, and you have
doubts -- in fact, if you have doubts about
anything – ask. Get to know your collegiate and
central financial folks and don’t be shy about
asking.”
“Realize that you are the ultimate steward
of all departmental accounts, including
faculty accounts, and keep an eye on
them. Faculty don't always pay attention
to balances (both too high and too low).”
“Help faculty understand that "rainy days" may
never come if they don't invest in their research
programs -- i.e., if you don't make tenure, then
those saved start-up funds don't matter.
It is the chair's responsibility to coach faculty in
making strategic investments in their research
programs. You would much rather a faculty
member be publication rich and cash poor, than
just the opposite (though faculty seldom
understand this and think it counterintuitive).”
A Few Final Suggestions
Build trust and relationships
Create a departmental fact sheet
“Other people’s money”
Share financial information with your
faculty and staff
Few decisions are just about money
Ask!