1. Presentation to Provost’s Department Chairs Leadership Program Suzanne Bardouche November 29, 2007

2. Fiscal Management from the Departmental Point of View

3. Fiscal Management Responsibilities Day – to – Day Accounting (especially, fund accounting) Payroll Management, Oversight and Planning Budgeting (planning) Management information

4. What is the Chair’s Role in Fiscal Management?

6. 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)

7. 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

8. 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.”

10. “ 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.”

11. Donated Funds DemandQuasi-endowmentEndowment Spending is through CUFS Chair’s role in oversight and stewardship

12. “You need transparent and fair fiscal procedures with faculty so that they understand why they can/cannot have funds for what they have requested.”

13. 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

14. “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.”

15. “Vision without resources is a hallucination.” --Bob Bruininks “Perhaps the first job of leadership is to help people face reality.” --Al Sullivan

16. Grants Management Role of Department Head Oversight from proposal stage through closeout Role of Certified Approvers

17. “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.”

18. 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

19. Assistance with locating and interpreting policies Knowledge of all departmental revenues and expenditures Pro-active approach in bringing issues to your attention Service orientation

20. “Once a month going through all accounts with the accountant or budget person works for me, and results in few surprises.”

21. “Develop a good, working relationship with both your collegiate CFO and your departmental accounting contact. This is critical.”

22. 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

23. 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)

24. “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.”

25. “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.”

26. “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).”

27. “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).”

28. 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!