1. 12/8/2018
Understanding the University Budget Joan King Associate Vice President Chief Budget Officer
November 1, 2017

2. 12/8/2018
University Operating & Capital Budgets Biennium - $2.297 Billion Total
Capital 13%
$296.7M
$2.0B
Operating 87%

3. 2015-17 Capital Budget Total Authority: $311
Capital Budget Total Authority: $311.7 M Projected Expenditures: $296.7 M (includes Re-appropriation Balances)
Parking 1%
WSU Building/Land Grant Endowment
16%
State General Bonds: Vancouver Applied Tech and Riverpoint Bio Medial Facility (breaks ground today), Minor Capital Renovations.
Building/Land Grant: MCR, pre-design for an Ag Animal Health Facility and design for a Clean Tech laboratory.
Housing/Dining: Major renovations (North Side, Duncan Dunn)
Athletics: Martins Stadium Remodel
Local/Private %
State General Obligation Bonds
26%
Housing & Dining 4%
S&A Fees & Athletics less than1% each

4. 2015-2017 Operating Budget Fund Sources – Estimated Total: $2
Operating Budget Fund Sources – Estimated Total: $2.0 Billion
Other 1%
Net Investment Income - 6%
Gifts/Endowment – 4%
*Net Operating Tuition & Fees
24%
Federal Appropriations 1%
*State Appropriations
16%
Provide examples of different activities associated with each part of the chart.
Net Restricted Student Fees 4%
Auxiliary Enterprises
14%
Federal Grants & Contracts
16%
Ed Dept Sales & Services 2%
Local Grants & Contracts 3%
State Grants & Contracts 9%
* Available for allocation

5. Sources of Funds for Core University Functions
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Sources of Funds for Core University Functions
State Appropriations
Net Operating Tuition
Facilities & Administrative (F&A) Fees on Grants and Contracts
All are used to fund the permanent operating budget of the University

6. WSU Budget Principles General funding is tracked by campus
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WSU Budget Principles
General funding is tracked by campus
Funding is credited to the campus that generates it through enrollment or research
Budget allocations are provided by the Budget Office to areas/campuses
Areas/campuses determine distribution of funding to their departments

7. WSU Budget Principles Special Funding Categories
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WSU Budget Principles Special Funding Categories
Funding routed to responsible areas •
Donated Funds
Facilities & Administration recoveries (aka F&A)
Allocation Transfers
Salary Accruals
Carryforward Balances
Policies dealing with budget savings/shortfalls

8. WSU Budget Principles Distribution of F&A Revenue
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WSU Budget Principles Distribution of F&A Revenue
For more information: BPPM 40.25

9. WSU Budget Principles Distribution of Generating Units F&A
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WSU Budget Principles Distribution of Generating Units F&A
23% of F&A revenue is distributed to revenue-generating units
Distributions are made in one of three ways:
PULLMAN CONTRACTS
URBAN CAMPUS CONTRACTS
WITH Academic Unit Affiliation
WITHOUT Academic Unit Affiliation
Department: %
Dean: %
Academic Dean: 11.5%
Chancellor: %
Chancellor: %

10. WSU Budget Principles Accruals (Salary Savings) Policy
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WSU Budget Principles Accruals (Salary Savings) Policy
Central pool provides for turnover costs (sick and annual leave payouts), and PIDs
Areas retain savings from vacant faculty and graduate student positions on WSU program 05 (libraries) and 06 (instruction)
Areas retain savings from the transfer of expenditures to grants (programs 11A-14Y) regardless of employee type
Central captures savings from vacant classified, administrative professional, and non-instructional faculty positions for the first four months. Subsequent accruals are returned to areas upon request
* WSU Vancouver, WSU Tri-Cities, Extension, and Ag Research manage their own accruals.

11. WSU Budget Principles Carry Forward Policy
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WSU Budget Principles Carry Forward Policy
What happens to funds at fiscal year end?
Most funds carry forward at the area level. Dean, vice president or chancellor decides if they carry forward at the department level.
Operating budgets
F&A accounts
Donated funds
Some funds do not carry forward
Equipment replacement allocations
Special allocations for specific purposes, such as proviso funds

12. 12/8/2018
Use of Biennial Budget – By Function State Appropriation and Operating Tuition
Plant Operations & Maintenance %
Institutional Support
10%
Instruction
50%
Student Services 5%
Library %
Primary Support 9%
Public Service 6%
Research 9%

13. 12/8/2018
Use of Capital Budget – By Expense Type State Appropriation, Land Grant Income, and Student Building Fees
Preventative Maintenance
(Operating) – 7%
Minor Capital Projects – 20%
Major Capital Projects – 73%

14. 12/8/2018
Use of Operating Budget – By Expense Type State Appropriation and Operating Tuition
Operations
15%
Benefits
18%
Salaries and Wages
67%

15. 12/8/2018

16. Managing Your Unit’s Budget
Brett Oglesbee
Director, Finance & Administration, College of Nursing
And
Don Holbrook
Executive Director, Office of the Provost

17. Overview Different Fund Types Budget Statements
Planning and Managing Accounts
Helpful Hints

18. University Accounting
WSU uses fund accounting
The source of funds determines the bucket it goes into.
State Appropriations
Self-Sustaining funds
Grant Funds
Donated Funds
Fund Level accounting segregates resources into categories or funds
Helps with identifying the source of these funds and to determine the allowable use of funds

19. Fund Types 001- State Funds 148 - Local Dedicated Funds
Can be PBL or Non-PBL Funds
Goods and Services which are necessary for the completion of official University Duties
001- State Funds
Service Centers- University Community
Summer Session
F&A accounts
148 - Local Dedicated Funds
Course Fees & Administrative Fees
Enterprise – Service Centers
570 – Other Enterprise Accounts
17A Accounts
Advancement Director’s
Scholarships & Dean’s Discretionary
846- Advancement & Scholarship Funds
Restricted based on the approved/awarded grant budget
145 – Grants & Contracts
Top four fund types listed on this page – we report annually to the Budget Office and are the most common fund types that you will interact with.
Bottom three categories are all self-sustaining

20. State Funds - PBL Permanent Budget Level or Permanent Base Line (PBL)
PBL applies only to your state funded budget
Departments normally receive the same PBL allocation each year and may include any of the objects (Static Budget).
A Mass Salary Increase (MSI) will increase your PBL budget
A Budget Cut will Decrease your PBL
Not all funds in you state accounts are PBL. State accounts also have temporary allocations which are normally one time allocations that you cannot depend on reoccurring.
Temporary allocations may come in the form of one-time faculty startup support that you receive from your Dean’s office.
Salary Accruals may be redistributed to your units budget

21. Preparing the Department Budget
Factors essential to planning the departmental budget (not necessarily listed in priority order) are:
The budget from the prior year (PBL and or One-Time Allocations).
Enrollment trends in program areas.
Adjustments in program offerings.
Requests for new line positions.
Requests for any additional office staff positions.
Program replacements or coverage for faculty on grants or sabbaticals.
Number of graduate teaching assistants (GTAs) and fixed-term or part-time faculty.
Part-Time or additional faculty needed to meet the enrollment demands of your program

22. Budget Statement 3 Main Areas of Your Unit’s Budget
Object 00 - Salaries
Faculty, Staff, Grad Assistants
Objects 01,02, 03, 04, 06,16 – Operating Expenses
Wages, Goods & Services, Travel, Equipment etc.
Object 07 - Benefits*
Which leads in to financial status reports – Budget Statements
Salaries expenses (for the most part) should be known at the beginning of the year
Operating expenses are what is needed on a day to day basis to run your program
You will have the most control of managing your operating expenses – with the goal being to ensure that your budgets are not exceeded

23. Budget Statement Layout
Expense Summary by Object
Expense Summary by Object/Subobject
Expense Detail by Object/Subobject
Revenue by Source Subsource
Revenue Detail
Each tab has additional information
Expenditures are summarized by object and by program
Within our chart of accounts, we have the object codes/titles and subobject codes/titles – provides information for each expenses – line item detail
Revenue tabs – for the most part most chairs won’t need to review these tabs (example - course fees)
Revenues are summarized by Source

24. Sample Budget Statements – Expense Summary by Object
Here’s a look at a program budget
Salaries - Encumbrance – looks like it is over budget (eventually the allocation will catch up and the balance will be ”0”)
Object 19 – this budget was over by ~$600 in the previous year was carried over into this FY.
Object 07 – Allocation matches the expenses
Operations – on the summary tab you can see the allocations spent %
Budget + Project = Account
Object Title
Object Codes
Object Titles
Object Codes

25. Sample Budget Statements – Expense by Object Subobject
Subobject Codes
Provides additional line item detail
Subobject Titles

26. Sample Budget Statement Expense Detail
“U” identifies Pcard Purchase
Detailed transaction detail for each posting

27. Helpful Tips Fiscal year runs from July 1 to June 30
The fiscal year is identified in the year that it ends (7/1/2017 – 6/30/2018 = fiscal year 2018)
Past or current budgets will generally be good indicators of overall service and supply needs in the department.
Monitor your budgets and ensure that expenses don’t exceed revenues/allocations.
Keep the dean's office aware of your department's budget position. Although the dean may not always be able to help, it is important to keep up an institutional awareness by constantly communicating your department's needs and cost pressures.
In Red Bold letters – kind of important
Also important to work with the Dean’s Office and your Area Finance Officer
As mentioned early about reporting annual revenue/expenditures – Any help that I can receive from the Dept Chairs, I value. I feel that as long as I am giving advanced warning, I can develop a plan to accommodate most requests.
The Value in budgeting is more with the process of during this on a continual basis
Circumstances will change, your units or departmental budget will change – so it is important to plan
Beginning of each year I meet with each of my program mangers to go over their operating budget – We also utilize info-burst to send out monthly budget statements. We also send out a semi-annual reports that shows % of budget spent compared to % of time past. All with the goal to ensure that budgets are not exceeded.

29. Sample Reports Monthly PBL Reconciliation
12/8/2018
Sample Reports
Monthly PBL Reconciliation
Monthly Area Reserve Cash Reconciliation
Area Reserve - 5 year projections
Commitment Tracking (w/ scanned documentation)
Budget Available vs Budget Awarded

30. PBL /DEPARTMENT/PAGE

31. Area Reserve Cash Reconciliation

33. Commitment Tracking

34. 12/8/2018
BUDGET / SPEND

35. BUDGET /
PLANNING

36. Expenditure Tracking

37. Looking at Expenditures at the 75% Mark

38. Tremendous increase in operations, due mainly to
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25% increase ’15 to ‘16
83% increase ‘12 to ‘16
Salaries up 50% ‘12 to ‘16
Tremendous increase in
operations, due mainly to
University initiatives.
Travel up 57% from ’15 to
‘16, but down from ‘12.

41. Tracking Benefit Allocations on 001

42. Tracking “Run Rate”

43. Need Help?
Key Contacts

44. OFFICE CONTACT FOR ASSISTANCE WITH: BUDGET OFFICE
Joan King, Associate Vice President
and Chief Budget Officer ;
CAPITAL BUDGET
Deborah Carlson, Capital Budget Director ;
Capital Budget
Carrie Johnson, Capital Budget Analyst ;
OPERATING BUDGET
Kelley Westhoff, Operating Budget Director ;
Operating Budget
Pete Beeson, Budget Office ;
Planning Budget Level (PBL), Budget Planning System (BPS)
Chris Jones, Budget Officer ;
Staff Planning, Fiscal Notes
Maggie McFadden, Budget/Policy Analyst ;
F&A Allocations, S&A Allotments, Fiscal Notes
Dave Anderson, Computer System Administrator ;
BPS
STAFF PLANNING
Anne-Lise Brooks, Budget/Policy Analyst ;
Staff Planning

45. OFFICE CONTACT FOR ASSISTANCE WITH: BUSINESS AND FINANCIAL SERVICES
Matt Skinner, Associate Vice President ;
CONTRACTS OFFICE
Amanda Owen, Manager ;
Contracts, real estate agreements, student affiliation agreements, interagency agreements, contract training
PURCHASING
Eric Rogers, Director ;
Procurement training, commodity purchases, personal services contracts
TREASURY
Karen Kellerman, Senior Investment Fund Manager ;
Banking relationships, investments, electronic payments, WSU Cashiering System
CONTROLLER’S OFFICE
Joy Morton, Interim Controller ;
General financial and accounting policy
Gerik Kimble, Associate Controller ;
Sponsored Programs Services, General Accounting, Accounts Payable, Travel and Purchasing Card
University Receivables
Debbie Stellyes, Manager ;
General questions, student accounts, collections, cashier’s office, general accounts receivable
Payroll Services
Rick Grunewald, Associate Director ;
General Payroll
Financial Reporting
Tami Bidle, Manager ;
Financial statements, account code setup, journal vouchers

46. Welcome to the Modernization Initiative
Department Chairs & Directors Workshop
November 1, 2017

47. 1980 to Today @ WSU Then Now Campuses 1 6 Faculty/Staff 4,400 8,000
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1980 to WSU
Then
Now
Campuses 1 6
Faculty/Staff
4,400
8,000
Unique Headcount Receiving a Payroll Distribution
18,800
Students Served
15,000
27,000
Operating Budget
$200 million
$1 billion
Research Expenditures
~$41 million
Nearly $300 million
Admin Processes and Systems
No Change
WSU has experienced significant growth without a corresponding modernization of core Grant Accounting, HR, Payroll and Financial processes and systems which are now over 35 years old.

48. 12/8/2018
The Need for Action
Risk of system failure and noncompliance is at a critical level; threatening business continuity
Inability of existing systems and processes to adequately and efficiently support the university’s growing research, instruction, and service mission statewide and around the globe
Administrative processes are layered, outdated and paper intense; creating high barriers to entrepreneurial innovation and effectiveness
Lagging analytics and reporting capabilities hinder strategic and timely decision making, and increase risk in under or overcommitting resources
Basic functions essential to University operations are at risk:
Pay our great faculty and staff. (Generating $615 million in payroll activity to over 18,800 unique headcount)
Tracking over $1 billion in operating budget and expense activity per year
Accounting and billing for $230 million in sponsored research and other grant revenue per year
Ensuring compliance with the demands of federal, state, and external funding regulations
Examples to share:
Risk is difficult to discuss without sounding panicked (“the sky is falling”) or unaccountably calm.
Yet, it is important for this senior leadership team to understand that the risks we face are very real and must be addressed.
Risk can be categorized into the buckets:
System failure and business continuity risk:
Legacy system uses a programing language no longer taught in school.
As of fall, just one person left who can code in this system.
Limited ability to secure additional developers to maintain the system.
Within the last 24 months, WSU has experienced a near miss that serves as case in point of system failure risk. In August 2014, a glitch in the legacy HR/Payroll system halted processing during the busiest pay cycle of the year, threatening to leave over 1500 employees and graduate students without a pay check. Fortunately, the system issue was fixed in time for payroll to be processed without delay. Unfortunately, the employee who found and fixed the issue retired in 2015.
Growing issues of limited compliance:
Paper leave reports is inaccurate 45% of the time, resulting in overpayments.
Inability to meet the demands of our instruction and research mission, the multi-faceted demands of the modern research university.
Lagging analytics and reporting capabilities hinder strategic decision making for individual faculty members and university leadership.
How many of you know how much budget you have, how much has been spent, and remaining amount as to today; without a complex reconciliation by your finance officer? No ability to truly track budget v. actual; no visibility outside without a complex reconciliation by fiscal professionals of the AFO to the budget status of the unit.
WSU lacks a grants accounting system capable of supporting current and aspirational research levels.
How much grant funds are remaining to spend, and how much will F&A costs take from grant?
Is your effort certification on your grants up to date and correct?
Faculty are unable to obtain suitable data regarding contract milestones, grant expenditures, and multiple principle investigator activity.
Research deliverables and invoicing are often late or missed due to disconnected manual processes.
Effort certification is time consuming, frustrating and inaccurate.
Internal and external stakeholders need quarterly proforma financial statements, but the legacy finance system cannot generate such reports, leaving WSU with a manual process that takes 5 months.
Overall decision making is slowed by the inability to obtain consistent and meaningful data.
New ideas and innovative initiatives are often stifled due to “the system can’t do it” constraints.
A recent survey of research faculty found that their top frustrations with post award research support were difficulties understanding how much was spend on grants, how much was billed against grants, and grant planning. All of these are symptoms of the legacy system’s ability to support the research mission.

49. Overarching Goals of Modernization
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Overarching Goals of Modernization
Eliminate  business continuity failure and compliance risk associated with continued operation of legacy HR, Payroll and Finance processes and systems
Deploy modern, effective, and efficient human resource, payroll, and finance services based on industry best practices to support the growing academic and interdisciplinary research enterprise
Replace inefficient paper based processes with intuitive online workflow on multiple devices
Enable real time analytics to support daily operations of the university at all levels
Leapfrog traditional systems deployed in the last 20 years to a modern and nimble, software service focused on business process design
Empower users to perform critical work in a modern way on the device of their choice
Work in a spirit of shared governance and open communication to effectively foster change
Pay employees
Support grants management accounting, timely billing, etc.

50. Simply Said Ensure Continuity of university operations Embrace
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Simply Said
Example: UI has 5,800 employees, and a relatively modern ERP. They have 2 individuals who run payroll each month. Department and Colleges at WSU spend over 63,000 hours a year, or over 30 full-time staff, just processing paper leave reports.
Ensure
Continuity of university operations
Embrace
Modern, scalable and standardized processes to support growth
End
Costly inefficient and ineffective processes
Encourage
Data enabled decision making and budget management

51. Estimated Timeline Fall 2017: RFP for software
Winter 2018: Independent readiness assessment
Spring 2018: RFP for implementation partner
Summer 2018: Funding model begins
Fall-Winter 2018: Full implementation begins
Summer 2020: Begin using system university-wide

52. modernization.wsu.edu

53. 12/8/2018

54. WSU Training Videoconference
12/8/2018
This has been a
WSU Training Videoconference
If you attended this live training session and wish to have your attendance documented in your training history, please notify Human Resource Services within 24 hours of today's date:
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