FY2014 K&C Division Budgeting Plan November 10, 2012

2 Why is Division Budgeting Important? 1.ASME Budgeting Consistency; brings all divisions in sync. with society-wide budgeting cycle. 2.ASME Policy 2.1 Compliance; divisions with expenditures over $100K must satisfy itemized budget requirement. 3.ASME Policy 8.1 Compliance; budgets are a key component of division health assessment. 4.Continuous Improvement; provides a key financial tool for effective division management. 5.Fiduciary Responsibility; improves financial visibility and accountability.

3 Division Budgeting Overview Background Technical Divisions have no previous budgets or budgeting process. Divisions can view financial data through crystal reports; however timing lags and net conference surplus bookings limit the usefulness of historical financial data for planning purposes. FY2014 Budgeting Objectives Introduce division budgeting as part of continuous improvement effort. Develop preliminary activity budgets for all divisions. Update budgets to include BOG-K&C Targets. Auto upload final budgets to ASME Systems; Starting March 1, Complete Budgeting Process: March 15, 2013.

4 Division Budgeting Process Initialized MS Excel Workbooks Create MS Excel Template MS Excel Template Initialize MS Excel Workbooks Review, Update & Approve Preliminary Budgets ASME Finance and Program Mgt. Staff ASME Accounting Systems EPAT Division Leaders & Program Mgt. Activity Focus (Bottoms Up) Approved Preliminary Budgets Revise and Approve Final Budgets BOG – K&C Targets for Rev & Exp allocation (Top Down) Approved Final Budgets Upload to ASME Accounting SeptNov DecJanMar Oct Feb Timeline Roll Out at Congress ASME Finance

5 Excel Workbook Template Summary Worksheet: e.g. Aerospace SUMMARY HistoricalCurrentPlan 2010A2011A2012A2013B2014B2015B2016B Revenue Item 1$xyz Item 2$xyz … Total Revenue$xyz Expense Item 1$xyz Item 2$xyz … Total Expense$xyz Net Surplus$xyz Custodian Fund Beginning Balance$xyz Net Change$xyz Investment$xyz Ending Balance$xyz ADMIN HistoricalCurrentPlan 2010A2011A2012A2013B2014B2015B2016B Revenue Item 1$xyz Item 2$xyz Total Revenue$xyz Expense Item 1$xyz Item 2$xyz Total Expense$xyz Net Surplus$xyz Schedules (sub-worksheets) CONF HistoricalCurrentPlan 2010A2011A2012A2013B2014B2015B2016B Revenue Item 1$xyz Item 2$xyz Total Revenue$xyz Expense Item 1$xyz Item 2$xyz Total Expense$xyz Net Surplus$xyz AWARD HistoricalCurrentPlan 2010A2011A2012A2013B2014B2015B2016B Revenue Item 1$xyz Item 2$xyz Total Revenue$xyz Expense Item 1$xyz Item 2$xyz Total Expense$xyz Net Surplus$xyz …

6 Excel Workbook Initialization FY2010 through 2012 Historical –Actual from Accounting Systems. FY2013 Budget –Based on input from divisions if they submitted a plan. –Flat to FY2012 for divisions that did not submit a plan. FY2014 Budget –Includes Conference Budget download from EPAT. –3% growth assumption. FY2015 & 2016 Budget –3% growth assumption.

7 Budget Review and Updates Preliminary Budgets (bottoms-up) –Focus on developing activity/transactional based budgets relative to custodian funds: –Updates Can be Entered as: Amount values in revenue and expense cells, or Percentage growth rates in rate cells Final Budgets (revise for top-down targets) –Includes “Higher Level” BOG-K&C Targets –Approval by Division Chair and Program Manager –Group Leader Approval (with staff director) –TCOB Leader Approval (with staff director) –K&C Approval

8 Excel Workbook Upload Div 1 Approved Final Budgets Div 2 Approved Final Budgets Up to Div 32 Approved Final Budgets... Upload to ASME Accounting Standard Excel Template Reduces Data Upload Effort Division Operations And Evaluation Upload to Coincide With ASME Society-Wide Budgeting Process (Target March 1, 2013) Budgets Used As A Vital Tool For Effective Division Management Budgets Used In Division Health Assessment

9 Potential Issues & Considerations Potential IssueConsideration Lack of Involvement & Incentive K&C Staff has reorganized to provide dedicated Program Managers who will engage Division Leaders. ASME Executives and K&C Leaders will emphasize importance with Division Leaders. Divisions under-participating risk reduced budgets. Lack of Education Staff Program Mangers skilled in budget management will partner with Division Leaders throughout. Staff Financial Managers are dedicated to support the process and lend expertise as needed. Getting an early start in the budget cycle is essential for learning. Resource Focus Primary focus on divisions requiring budgets by policy. Secondary focus to include all divisions in process. Budget Accuracy Starting early and working iteratively, division leaders working with staff will refine budget forecasts. Meeting Target Upload Date Starting Early, Providing dedicated support with clear direction.

10 Budgeting Milestone Schedule MilestoneDeliverableResponsible November 15, 2012Pre-populated Budget (Excel File) Distributed to Each Division ASME Finance and Program Management December 15, 2012Submit Preliminary BudgetDivision Chair and Program Management January 15, 2013Establish K&C TargetsK&C Leadership and ASME Finance February 15, 2013Submit Final Budget (Revised to include K&C Targets) Division Chair and Program Management March 1, 2013Final Budget Approved (File Upload between March 1 and 15) K&C Leadership and ASME Finance March 15, 2013ASME FY2014 Budgeting Process Complete ASME Leadership

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