FORECAST REFRESHER TRAINING March 2015

2 Agenda I. Pay Period 27 Discussion II. Forecast Overview III. Cognos/TM1 Demo - Forecast Basics

Pay Period 27

4 The Issue  In 2015, there are 27 pay checks during the 52- week calendar year instead of the usual 26  Most organizations, including WHOI, will pay this 27 th paycheck on top of regular salary  Results in a 3.846% one-time (every 11 years) addition to your base salary

5 Why?  Affects any organization that pays employees on a bi-weekly basis  This oddity occurs every 11 years:  26 bi-weekly paychecks only cover 364 days in a year, not 365 (366 in Leap Years) 26 pay periods x 14 days = 364 The “365 th ” days add up to an additional pay period over 11 years (based on pay date and holidays, etc)

6 Why? Continued…  For employees paid on Fridays (like WHOI), 2015 is a prime year  1/1/16 falls on payday of what would be last pay period of the year, so payments go out 12/31/15

7 Other Considerations continued…  Employees need to pay attention to any tax or retirement consequences of this additional payment for their personal situations  Note: Additional WHOI paycheck will have all applicable tax withholdings  No case law, regulations or guidance directly addressing this issue  Left to employer to decide

8 Other Considerations continued…  Different organizations take other options, depending on offer letter & employment contract terms (annualized salary vs. bi-weekly amount):  Redistribute set annual salary among 27 checks Ex: annual salary of $100k, pay $3,703 over 27 pay periods (vs. the $3,846 over the usual 26 pay periods). Risks: morale issues, possible exemption issues, claims of not being paid for work performed – scrutiny over specific offer letter terms  Switch to semi-monthly or monthly paychecks and avoid the issue in the future

9 $ Impact to WHOI  Approx. $2M ($1M OH / $1M Research)  Favorable impact to multiplier due to increase in base  Potential that WHOI will over-recover, based on budgeted numbers

Forecast Overview

11 Forecast Overview  Objective: To provide your latest estimate of the full year 2015  Principles:  4 forecasts per year; 1 per quarter  Starting point for each forecast will be your actuals to date plus your prior forecast (for the non-actual months) Example 1: Forecast Q will have actuals for Jan plus your prior forecast (Approved Budget 2015) for Feb – Dec Example 2: Forecast Q22015 will have actuals for Jan – Apr plus your prior forecast (Forecast Q1 2015) for May – Dec

12 Forecast Overview  Principles - continued :  Finance will rely on these forecasts to proactively provide updates to the Finance Committee and Board Budget owners know and own their operations – can provide much better projections Can respond more quickly to changes affecting their budgets and make adjustments as needed  Increasing need to provide timely updates internally and externally  Forecasts will be loaded each quarter to the FSR’s (replacing prior quarter information)

13 Forecast Overview  Principles - continued :  Forecasting more “formally” in Cognos/TM1 allows WHOI to: Gain much more accurate insight from the budget owners (vs. a high level forecast done by Finance) Efficiently calculate and process a total revised estimate Provide timely, accurate and thorough projections to management Populate our “data vault of truth” so the information can be stored as historical data to report and compare against (vs. multiple offline excel spreadsheets stored everywhere)

Cognos/TM1 Overview

15 Cost Center Plan  Rev & Exp Planning, Rev & Exp Monthly or RPT: Rev & Exp Rollup (can enter to any of these 3 views):  For input to NON-Salary object codes  Enter any revised total 2015 spending estimates to the total “Amount” column System will take your new total amount, deduct actuals to date, and spread the difference to the forecast months  You can also enter a monthly amount to the applicable month column System will accept this monthly amount and add it to your total Always Commit (Save) your changes

16 Cost Center Plan  Rev & Exp Planning or Rev & Exp Monthly:  Example: Current total “Supplies” estimate for the year is $3,400 January actuals are $400 But, you know your true forecast is only $3,000 You would enter “3000” in the total column System calculated monthly amounts would be: Jan $400 (actuals) Feb – Dec $236/month ( = 2600; 2600/11 months = 236/month) Always Commit (Save) your changes

17 Cost Center Plan  Workforce Planning:  Revise/Update TBH’s as needed Start and End dates do not apply – assumed full year, so enter hours they will work for that year  Revise/Update hours per person as needed System will calculate dollars & fringe, PA, etc. System takes “new annual salary dollars” minus “actual salary dollars to date” and spreads the difference over the forecast months  The system populates the dollars to the salary & benefit object codes (in Rev & Exp Planning) Always Commit (Save) your changes

18 Cost Center Plan  Workforce Planning continued :  One slight complexity: a promotion that wasn’t originally budgeted in 2015 Why? Because we don’t currently load actual hours Resolution? Offline calculation and entry to “Override Regular Salaries” (and/or “Override OT Salaries” if necessary) Finance created template is available Always Commit (Save) your changes

19 Cost Center Plan  Capital Planning:  Revise/Update capital spending as needed  Note: can not make any prior year corrections Always Commit (Save) your changes

20 PI Hours  Research Hours Planning:  Revise/Update TBH’s as needed  Revise/Update hours per person as needed Always Commit (Save) your changes

21 Financial Statement Reporting  Revise/Update any of your line items residing in your tab of data  The system will pre-populate the forecast column with your last forecast (for Forecast Q1 2015, it will be pre-populated with Approved Budget 2015) Always Commit (Save) your changes

22 Forecast Q Due Date: March 27 th – end of day ** Please let us know if you run into any issues or need additional time.