ADLA Budget Application For Parishes ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 ADLA Budget Application For Parishes Good Morning, today’s webinar will introduce and demonstrate the Archdiocese of Los Angeles’ Budget Application to be used by the Parishes to forecast their budget for the current fiscal year 2014-2015 and to create an actual budget for fiscal year 2015-2016. With us today is …………, once the power point presentation and webinar are complete we will have some time for questions, comments and/or suggestions. So please save them till the end. The Archdiocese of Los Angeles’ Budget Application webinar will be presented in five parts; 1. We will begin by explaining the basics of budgeting 2. We will introduce the application and show some of the applications’ features 3. We will do a quick walk-through in completing the application 4. We will explain how adjustments to the pre-populated amounts affect the application 5. We will then summarize what we talked about in today’s webinar   So let’s begin FY2015 (c)2015 Archdiocese of Los Angeles ACC Financial Services Group Financial Services

ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 What is a Budget? Financial Plan of Action for the Parish A Projected Cost of the Parish Plan and the Projected Income to Support it A Systematic Approach to Realistically Estimate Income and Expenses Helps to Foster Stewardship Growth A Guide in Making Day to Day Financial Decisions What is a Budget? ACC Financial Services Group Financial Services

ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 Why Budget? The Parish Controls Its Expenses and Avoids Year-End Deficits Confirms that Spending is Consistent with Parish Goals and Pastoral Priorities. ACC Financial Services Group Financial Services

Who Can Create & Approve The Budget? ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 Who Can Create & Approve The Budget? Business Manager/Accountant Responsible for maintaining & preparing financial records Pastor Approves the Budget Consults with the finance council & business manager/accountant Pastor is Responsible for Establishing and Adhering to the Parish Budget ACC Financial Services Group Financial Services

When Should the Budget be Prepared? ARCHDIOCESE OF LOS ANGELES ADLA Budget Application When Should the Budget be Prepared? FY 2015 Fiscal Year 2015-2016 Budget is due May 15, 2015 Prior to the End of the Current Fiscal Year Fiscal Year 2014-2015 Late Enough to Reflect the Performance of the Current Fiscal Year Fiscal Year 2015-2016 Early Enough to be Useful for the Upcoming Fiscal Year ACC Financial Services Group Financial Services

The Budget Process Step 1 – DATA COLLECTION Step 2 – FINDING TRENDS Step 3 – APPLYING TRENDS Step 4 – PROJECTING & ESTIMATING EXPENSES Step 5 – EVALUATION & RECONCILIATION The budget process involves several steps as listed on the slide, data collection (weekly, monthly and/or quarterly financial reports, bank statements, collecting income and expenses history), finding trends will include tend projection and evaluating the economy, applying trends will include estimating income and expenses, and what direction is the income or expense moving. You want to evaluate your expenses in the current and upcoming fiscal year, this will involve knowing your parish expenses. Finally evaluating and reconciliation all of your information – this is when you prioritize your expenses, what’s essential and what can wait.

Step 1 -Data Collection 3 Year History of Income & Expenses Current Fiscal Year Income & Expenses (first 9 months) Forecast Capital Expenditure and Purchase Information Payroll Information The budget application will have 3 years of historical data entered that was taken from the annual reports submitted for the three previous fiscal years, you cannot change this number. In order to forecast the current fiscal year (projected) you will run a balance sheet as of March, 31st and divide the balances by 9 (months) and then you will use that number and multiply it by 12. this will give you a forecast fro the current fiscal year. Have any current and future capital expenditures and purchases that need to be taken into account when creating the parish budget, and also have available any payroll records, payroll is usually the highest expense you will have.

Step 2 - Finding Trends Any Seasonal Increases (Highs) or Decreases (Lows) in Income/Expenses Income/Expense Accounts that are Continually Increasing/Decreasing No Significant Changes in Prior Years Safe to predict no changes in coming year The Effect of the National and Local Economy One element to always take into account when creating a budget is paying close attention to how income and expenses are affected by various seasons, (i.e., Holy week, Christmas, summer events, travel, charities contributions). Are there any accounts that are continually increasing? Is income (i.e., collections) constantly going up?, Are expenses (office supplies, utilities) on the rise? Maybe there has not been any significant change to an income or expense account in the previous three years, it would be safe to predict that no significant changes will occur in the coming fiscal year. How does the national and local economy affect your budget. Examples can be an increase in gas for parish vehicles, utilities, permits, taxes and payroll (is there an increase in the minimum wage?)

Step 3 - Applying Trends Find the direction of the trend Increase, decrease or no change? Is the Trend Continual or Constantly Changing? What is the Extent of the Trend? Using the Trend to Predict The direction of income & expenses Once you understand what direction your finances are headed you can applying these findings to better predict your budget in the coming fiscal year. These trends you have found can now be used to project the coming year’s income and expenses. After applying the trend to next year’s income and expenses, ask yourself the following; 1. Does the projected income and expenses for next year seem reasonable? 2. Are there any other factors we have not accounted for? 3. Do we need to adjust our estimates after reviewing the trends we found?

Step 4 - Projecting & Estimating Expenses Breakdown of Expenses by Category 1.Payroll (usually Parish’s highest expense – 35% to 50%) 2.Fixed Expenses (rent, loans, assessment, taxes, subsidies to schools) 3.Operating Expenses (day to day expenses, maintenance, utilities) 4.Discretionary Expenses (programs, ministries, events) 5.Capital Budgeting (large expenses, construction, cars) A good way of projecting & estimating your expenses is by breaking down the various categories, payroll, fixed expenses, operating expenses, discretionary expenses and budgeting for future capital expenses and/or purchases. Payroll is usually a parishes’ biggest expense, using payroll records from previous years will be a quick and efficient way of estimating future payroll needs. Fixed expenses, what do we pay for rent?, do we have any outstanding loans with a fixed payment schedule? Do we provide a subsidy to the school (same amount every year?). What is our day-to-day operating expense?, how much do we pay for maintenance and utilities (weekly/monthly?) How much of the parish budget is being used for parish programs and ministries. How are future events funded? (i.e., ??????????????)

Step 5 - Evaluation & Reconciliation Is the Budget Realistic & Reflects the Current Operating Environment? Income – Expense = Profit/Operating Loss What is the Parish Doing to Increase Revenue? Is the Payroll in Line with the Pastoral Plan and Parish Goals? Are there any Payroll Adjustments Needed in Regards to Hours and/or Personnel? Fixed Expenses are Non-Negotiable!!! Once you have estimated the parish income and expenses, you can discern whether or not your budget is realistic and reflects the current operating environment. Are we estimating a profit or a loss in the coming fiscal year. What is the parish doing to increase revenue, and decrease expenses. Is payroll in line with the pastoral plan and parish goals? Will there be any changes in hours and personnel in the coming fiscal year? Remember fixed expenses are non-negotiable and are usually established by contractual terms,

Step 5 - Evaluation & Reconciliation Operating and Discretionary Expenses; Which expenses are essential? Which of these expenses and/or purchases can be delayed? Can these expenses be solicited as donations to the Parish? What alternatives are available for existing programs without cost? Are there events that can be totally or partially self-supporting? What measures/programs can be initiated to manage cost? (i.e. water and electricity conservation?)

Managing the Budget Managing Income Using the budget to be pro-active and not reactive Creating Reports (Monthly/Quarterly) Monthly/quarterly review, accounting software Managing Expenses Are expenses increasing compared to the previous year Investigate, determine why A budget c

The ADLA Budget Application Create a Forecast for current FY 2014-2015 Create a Budget for FY 2015-2016 Previous 3 Year Annual Report Ending Balances FY 2013-2014 Actual Annual Report Amounts are used to calculate the 2014-2015 Forecast 2014-2015 Forecast Amounts are used to calculate the 2015-2016 Budget Amounts Can Only be Adjusted in Columns Labeled “Forecast Projected 2014-2015 & “Budget 2015-2016” As Information is Populated for “Forecast Projected 2014-2015”, Amounts will Populate the “Budget 2015-2016” Column, but these Amounts Can Be Overwritten!

The ADLA Budget Application ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 The ADLA Budget Application WARNING-!!!! Print out a copy of the summary (page 5)before you begin!!! Once you submit you report, you will not be able to make changes 3 Ways to save your information Drop Down Menu Forward (right) and/or back (left) arrows Log out link at the top of the page A Reset Button is Located to the Right of the Columns This will return your information to the original pre-populated amounts You may save your work and return later to complete the report, If you have not submitted the final report ACC Financial Services Group Financial Services

Application Login Instructions Select Your Internet Browser

Application Login Instructions Enter the Following URL: http://apps.la-archdiocese.org/ADLABudget/

Application Login Instructions Enter Your Login Information When Prompted User Name: ACC\Username Password: Your Password

Application Login Instructions After Logging in, Click on View Parish Listing Button

Application Login Instructions If No Records are Showing, Then Click on the Parish Fiscal Year 2015-2016 Button See Figure A

Application Login Instructions If There is Already a Record for 2015-2016, Click on the Details link See Figure B

Application Login Instructions The Budget Form Will Load Review the Pre-Populated Amounts If changes are necessary, enter the new amounts in these two columns

Application Login Instructions Once Complete, Click on the Arrow at the Bottom to Navigate to the Next Page This Will Save Your Information

Components of the ADLA Budget Application Page 1 – Ordinary Income Page 2 – Restricted Income Page 3 – Ordinary Expenses Page 4 – Other Expenses Page 5 – Summary Page Page 6 – Submission Page

ARCHDIOCESE OF LOS ANGELES ADLA Budget Application FY 2015 Page 1 – Ordinary Income ACC Financial Services Group Financial Services

Show Summary Feature “COOL FEATURE” - Show Summary Box & Button Allows the User to Preview the Entire Report as Changes are Entered

Show Summary Feature

Page 2 – Restricted Income

Page 3 – Ordinary Expenses

Page 4 – Other Expenses

Page 5 – Summary Page Will Display all the Pages of the ADLA Budget in Long Form Amounts will Update as Information is Changed in the Previous Pages No Adjustments can be Made to the Summary Page

Page 5 – Summary Page

Page 6 – Submission Page Can Only be Accessed after Clicking on the Summary Page Right Arrow Once Submitted the Budget Application Cannot be Edited!!! You Must Contact Financial Services for Changes to Your Report

Page 6 – Submission Page

Submission Page Once You Have Completed Reviewing All of the Pages, Submit Your Report Enter Preparer Name, Phone #, and Any Comments as Necessary Hit Submit Button, ONCE SUBMITTED THE REPORT WILL BE LOCKED!!!

How the Information is Calculated Every Account has a Percentage Assigned to it by The Archdiocese The Percentages can Range from 0% to 6.25% The Archdiocese Assessment is Calculated Using the Ordinary Income Total from the Previous Fiscal Year You Will Create Your Own Forecast!!!!

Forecasting Steps in Completing A Forecast for Fiscal Year 2014-2015 “Forecast Projected 2014-2015 Column has Pre-Populated Amounts Based on FY 2013-2014 Ending General Ledger Balances Steps in Completing A Forecast for Fiscal Year 2014-2015 Balance Sheet as of March 31, 2015 Divide the Balances by 9 Months Multiply the Amounts by 12 Months The Solutions will be your Forecast for FY 2014-2015 The Amounts for Budget 2015-2016 will recalculate Budget 2015-2016 will be Created!!!

Steps for Completing the ADLA Budget Application Gather All Current Fiscal Year Financial Information Print Out a Hard Copy of the Summary (page 5) Review Pre-Populated Amounts Make Adjustments Review Completed Report Submit

Making Adjustments You May Enter an Adjustment in Both the Projected and Budget Columns Only You Cannot Make Adjustments to the Summary Page (page 5) Forecast Projected – If You Change and Save Amounts, the Formula is not Protected!!! Reenter Original Amounts, If Necessary (BE SURE TO PRINT OUT A COPY WHEN YOU START!!!!)

How Adjustments Affect the Application Eliminates the Formula from the Forecast Projected Column Changes Total on the Current Page & the Summary Page Entries in Forecast Projected Column Changes the Budget Column Manual Changes to Budget Column will not Affect Forecast Projected Column

SUMMARY Budget – What, Why, Who, When Access Budget Application Online Budget Due by May 15, 2015 Cannot Make Changes Once Submitted Contact Financial Services for Updates & Make Changes

CONCLUSION Any Questions, Suggestions and/or Comments? fsbudgethelp@la-archdiocese.org