1. Detailed Educational Activities Board Budget and Where it Comes From
EAB Meeting - June 29, 2013
Hilton Bay front – San Diego, CA
Ed Rezek, EAB Treasurer Chris Salicco, IEEE Business Finance Solutions, Director EAD Finance and Administration
12/6/2018

2. Table of contents EA Budget overview 2013 Budget 2014 Budget
New Initiatives and Humanitarian Grants
2013 Budget
Committee Org Chart
Cost Centers
2013 Budget compared to 2012 Budget
2013 Budget compared to 2012 Actual
2013 Forecast as of May
2014 Budget
Preliminary
Over-target activities list
12/6/2018

3. Table of contents (2) IEEE FinCom Meeting Highlights 29 May & 27 June
Background material
Detailed Cost Center breakdown
2012 Budget information
Past 2013 IEEE FinCom updates
12/6/2018

4. EA Budget Overview
In 2013 EAB will have 10 cost centers within EAB, 3 that are outside of EAB’s bottom line
US Accreditation, IEEE Continuing Education & IEEE- HKN
3 Humanitarian grants and 1 New Initiative Seed Grant.
12/6/2018

5. New Initiatives & Humanitarian Grants
Why is this important to us
After the NIC budget runs out the initiatives are unfunded
If continued
Must be operationalized in the EAB budget
Or funded elsewhere
NIC/Humanitarian multi-year support has been $660K for the four (4) initiatives ending in 2013
2013 budget includes ~$100K for sustaining costs for E4E and Try Computing
12/6/2018

6. 2013 Budget

7. 2013 IEEE EAB Standing Committee Organizational Chart
12/6/2018

8. EA Cost Centers - 2013 Not in EAB budget
US Accreditation (23000) Global Accreditation (23001)
EAB Board Support (23010) University Activities (23019)
Pre-University & TISP (23020) Certification Biometrics (23021)
Products & Services (23200) Educational Programs (23210)
Continuing Education (23220) Standards Education (23345)
Admin and Overhead (23499) IEEE-HKN (23550)
Was eLearning
Expanded scope to cover more CE products
Turned into a P&L for 2013+
Is being marketed by IEEE M&S
Not in EAB budget
Financials reported through EAB
Have restricted reserves that carry between calendar years (do not grow/shrink with market flux but by financial success of operation
- Why? Not appropriate to fund with member dues
Accreditation reserve $133K
Continuing Education reserve ~ $859K
12/6/2018

9. 2013 EA Budget compared to 2012 Budget
Requested thru FinCom for bus dev in India & Singapore;one-time only
2012 Budget
2013 Budget
Rev
Exp
Net
 ** Continuing Education
1,000.0
(1,000.0)
* US Accreditation
389.2
* IEEE eLearning
320.0
885.0
884.2
0.8
Global Accreditation
320.4
(320.4)
307.1
(307.1)
EAB Support
662.9
(662.9)
658.0
(658.0)
University Activities
602.0
(602.0)
493.0
(493.0)
Public Education
3.0
880.3
(887.3)
3.1
779.6
(776.5)
Certification in Biometrics
400.0
617.0
(217.0)
630.0
(230.0)
Educational Product & Services
221.4
737.9
(516.5)
167.9
729.8
(561.9)
Educational Programs
8.7
(8.7)
300.0
(300.0)
Standards Education
198.5
(198.5)
180.5
(180.5)
Admin & O/H
4,309.8
906.4
3,403.4
4,217.7
710.7
3,507.0
IEEE-HKN
319.9
375.5
Total
5,254.1
5,164.2
Not in EAB budget
All FTE in the P&L (removed from here)
Convert consultant to FTE and include expense here (removed from here)
Number of HG members down in 2013
Includes 2 FTE added in Singapore and India for Continuing Education Partnership development

10. EA Budget 2013 vs 2012 Actuals Not in EAB budget Funded only for 2012
2013B known to be too high
2012 Actuals
2013 Budget
Rev
Exp
Net
** Continuing Education
602.6
(602.6)
* US Accreditation
379.2
349.3
29.9
389.2
* IEEE eLearning
473.3
386.8
86.5
885.0
884.2
0.8
Global Accreditation
353.8
(353.8)
307.1
(307.1)
EAB Support
640.1
(640.1)
658.0
(658.0)
University Activities
7.5
436.3
(428.8)
493.0
(493.0)
Public Education
836.1
(836.1)
3.1
779.6
(776.5)
Certification in Biometrics
256.6
705.2
(448.6)
400.0
630.0
(230.0)
Educational Product & Services
82.9
741.9
(659.0)
167.9
729.8
(561.9)
Educational Programs
300.0
(300.0)
Standards Education
180.6
(180.6)
180.5
(180.5)
Admin & O/H
4,309.8
770.7
3,539.1
4,217.7
710.7
3,507.0
IEEE-HKN
191.5
257.7
(66.2)
375.5
Total
4,848.3
4,922.4
(74.1)
5,164.2
Not in EAB budget

11. 2013 May Forecast Not in EAB budget
23010 variance due to Nov12 Awards ceremony moved to Feb13
Other variances explained on following pages
12/6/2018

12. 2013 EAB Forecast Variances
EAB is unfavorable to budget $299.1K due to declining revenue from Products; Budget error in Bio Cert
Partially offset by cost savings in other cost centers
Major Variances:
Biometrics Certification ($60.6K) - Revenue forecast was overstated in the budget because the 2012 process used the 2012B rather than the 2012A. Government contracts delayed due to sequestration causing sales to be short.  Have reduced expenses in the areas to reduce the $291.8K as much as possible and will continue to do so.  
12/6/2018

13. 2013 EAB Forecast Variance (2)
IEEE-HKN ($47.5K) - Revenue for the program is estimated too high as the membership from IEEE-HKN is strong but the algorithm where IEEE-HKN pays MGA for Student membership of the inductees reduces the revenue greatly.  IEEE-HKN has offset some of the loss in revenue by cutting some expenses. 
Products and Services ($128.8K) - At this time we have removed the $98.8K in revenue that was estimated from India and Singapore Continuing Education.  We believe the opportunity is there for revenue but are unsure of the amount being this is just launching.  The additional $30K is costs for a Market research shared with IEEE Corporate.
12/6/2018

14. EAB 2013 Budget Risks & Opportunities
Biometrics Certification revenue – EAB now calculating costs to terminate the program
English for Engineering revenue
IEEE-HKN funding model
EAB budget will be over due to cancellation of November Awards ceremony and holding it in February 2013
Opportunities:
Increased revenue from existing products - eLearning Library and CEU Program
New revenue from the Virtual Continuing Education Platform pilots
New revenue from India and Singapore Continuing Education pilot programs
12/6/2018

15. 2013 EA Cost Center Budget Breakdown

16. US Accreditation (23000) Revenue $389.2K Expenses $389.2K
Net budget = $0K
Forecast through May = $0K
This cost center sits outside the EA budget as it is a holding account. This cost center is for all US Accreditation expenses without staff time. Includes all committees that support US Accreditation activities.
The holding account is used to offset any overages and also give an indication of when an assessment increase might be needed to support the activities.
The holding account has an approximate balance of $132.6K entering 2013
12/6/2018

17. Global Accreditation (23001)
Net budget = ($307.1K)
Forecast as of May ($307.1K)
This cost center is for all Global Accreditation activities and also has FTE’s for US Accreditation & Global Accreditation.
The US Accreditation FTE’s are located here
US Accreditation holding account includes expenses for the program excluding staff
IEEE Financial Planning recommended to place FTE’s in Global Accreditation.
12/6/2018

18. EAB Board Support (23010) Net budget = ($658.0K)
Forecast as of May = ($700.1K)
($43K) Variance is due to EA holding the 2012 Awards Ceremony at the 2013 February BoD series due to cancellation in November due to Hurricane Sandy. EAB will also hold the 2013 Awards ceremony at the November BoD series as scheduled.
This cost center is used for EA Board meetings, governance, Awards ceremony and EA staff that support these functions, as well as infrastructure charges.
12/6/2018

19. University Activities (23019)
Net budget = ($558.5K)
Forecast as of May = (477.0K)
$81.5K Variance is due to shifting costs to cost center to cover conversion of consultant services to FTE, which caused an overall savings to EA’s budget by bringing the expertise in house.
This costs center supports:
All University related activities, staff support and infrastructure charges
All Committees that support University Activities
12/6/2018

20. Pre-University (23020) Net budget = ($863.5K)
Forecast as of May ($775.5K)
$88K Variance is due to shifting costs to cost center to cover conversion of consultant services to FTE, which caused an overall savings to EA’s budget by bringing the expertise in house.
This cost center supports:
Try Engineering $200K
Teacher in Service Program $228.2K
All other Pre-University/Public Education related activities, staff support, committees and infrastructure charges
12/6/2018

21. Biometrics Certification (23021)
Expenses $630K Forecast $541.8K
Budgeted Revenue $400K Forecast $250K
Net budget = ($230K) Forecast Net = ($291.8K)
($60.6K) Variance - Revenue forecast from Sales and Marketing was reduced as government contracts are held up at this time causing sales to be short.  This program was designed to sell to government agencies, but with the Federal Government budget having sequester issues it has impacted sales.
Cost center supports:
Learning Management Capitalization expense = $132.8K
Staff time, Infrastructure, Marketing & Testing charges
12/6/2018

22. Products & Services (23200) Expenses $731.2K Forecast $731.8K
Estimated Revenue $168.2K Forecast $40K
Net budget = ($563.0K) Forecast Net = ($691.8K)
($128.8K) Variance - $98.8K in revenue estimated from India & Singapore Continuing Education has been reduced to $0.  We believe the opportunity is there for revenue but are unsure of the amount being this is just launching.  The additional $30K is costs for a Market research shared with IEEE Corporate.
This cost center supports the Continuing Education Providers Program, Continuing Education expansion (India & Singapore), Virtual Continuing Education Platform Pilots and Research and Development for continuing education.
Supports all staff that support these programs and projects
12/6/2018

23. Educational Programs (23210)
Net budget = ($0.0K)
Forecast as of May ($309.0K)
($309.0K) Variance is due to the hiring of an FTE to take over the functions of a consultant who was working on various promotion, content development, “research” in Pre-University, University Activities, Standards Education and IEEE-HKN.
The overall affect on the EAB budget is an overall savings of $75K per year by bringing the expertise in house.
12/6/2018

24. Continuing Education (23220) Change Starting in 2013
eLearning cost center has been expanded to include E4E & CEU’s and is called Continuing Education
EAB product suite with a P&L
As a P&L
All expenses and revenue contained in cost center
Good year grows the surplus, bad year shrinks the surplus
Reserves fund continued expansion of products
Including new products of this type
12/6/2018

25. Continuing Education (23220)
Total revenue $884.3K Forecast $511.4K
Total expense $883.8K Forecast $519.4K
Net budget = $0.5K Forecast Net = $8K
$7.5K Variance - revenue for E4E has been reduced from 200K to 10K, eLearning Library has been reduced from 550K to 400K. However, we were able to reduce expenses to manage the budget to the revenue received.
This cost center sits outside the EA budget as it is a reserve account. This cost center supports all costs and revenue sharing expenses including staff time
The reserve is used to offset any overages and support the development of Continuing Education products (eLearning Library, CEU Program and English for Engineers). At year end if these products produce a surplus the reserve will grow, if there is a shortage the reserve will be used to cover it.
The reserve has an approximate balance of $859.0K entering 2013
12/6/2018

26. Standards Education (23345)
Net budget = ($200.4K)
Forecast as of May = (180.4K)
($20K) Variance is due to shifting costs to cost center to cover conversion of consultant services to FTE, which caused an overall savings to EA’s budget by bringing the expertise in house.
This budget supports:
Grant Program $25K
Standards Portal Search maintenance $40K (cost shared with IEEE Standards equally)
Staff support and committee activities
12/6/2018

27. Admin & Overhead (23499)
Total Dues Revenue Share = $4,218.0K (Member Dues)
Total expense = $836.0K Forecast $735.7K
Net budget = $3,382.0K Forecast Net $3,482.3
$100K Variance due to shifting costs to cost center to cover conversion of consultant services to FTE
This cost center was set up to centralize the Member Dues revenue rather than spread it out across the EA Budget.
Cost centers receiving member dues revenue
University activities Public education
Certification Globalization
EAB support Educational Programs
Products and services Standards Education
Admin & overhead
Funding split determined by EAB leadership based on most proximate year actuals
12/6/2018

28. IEEE-HKN (23550) Budgeted Revenue = $375.6K Forecast $257.2K
Expenses $375.6K Forecast $304.7K
Net budget = $0K Forecast Net = ($47.5K)
($47.5K) Variance - Revenue for the program is estimated too high as the membership from IEEE-HKN is strong but the algorithm where IEEE-HKN pays MGA for Student membership of the inductees reduces the revenue greatly.  IEEE-HKN has offset some of the loss in revenue by cutting some expenses. 
Cost center supports all IEEE-HKN governance, chapter expansion/revitalization, publications, student leadership conference and staff that support the program.
Revenue is based on money from the restricted fund in the IEEE Foundation, dues from inductees, sales of cords and stoles, ad space in the Bridge and donations
12/6/2018

29. 2014 Budget

30. EAB Budget 2014 Change
IEEE infrastructure allocation methodology is changing
Overhead costs being removed from FTE’s and non-revenue generation cost centers
Corporate overhead removed from all IEEE cost centers
IT remains an infrastructure charge
Packaged product revenue and member dues are being ‘taxed’ to fund infrastructure
Impact
FTE infrastructure cost will be lower (computer lease expense….)
Overhead costs disappear (except IT)
Less revenue from products
Less revenue from dues
7.5%
12/6/2018

31. EAB Budget 2014 Challenges
The biggest challenge for EAB is the funding model. IEEE Member Dues allocated to OU reduced by 7.5% due to the “G&A” change. In order to grow EAB we need to find an alternate funding model.
IEEE FinCom requests that MGA, EAB and Spectrum make up a $ K variance.
With 1 New Initiative and 3 Humanitarian Grants that will expire at the end of 2013, we need to look at how to make them operational if determined they should be continued.
Grow our current products and develop others that will produce a revenue stream to help support EAB and the IEEE bottom line.
12/6/2018

32. 2014 Target Budget vs 2013 Budget
Not in EAB budget
12/6/2018

33. 2014 EAB Over Target Items

34. Over the Target Budget (1)
1. FTE in Singapore – $125K, to support Education in the areas of Pre-University education and Continuing education. This supports IEEE’s Tax incentive application approved by the Singapore Economic Development Board
Portion of the Tax incentive savings will offset the salary cost.
2. EPICS in IEEE – $250K – $170K to support the program and $80K to convert temp position to an FTE
3. Virtual Continuing Education Platform - $186K – 10 Licenses and support/maintenance for events
Estimated revenue of $295K.

35. Over the Target Budget (2)
4. IEEE-HKN investment - $250K to support expansion of IEEE-HKN globally and a market research focused on products and services that will produce a revenue stream 5. EAB Mini Series - $20K – $70K to support the goals of the restructuring of EAB 6. Shared Services FTE - $80K to support projects and programs throughout EAD currently supported by a temp

36. Over the Target Budget (3)
7. SPARK - $60K – to deliver on one of the recommendations from Sections Congress 2011 which states: “IEEE to publish a subscription periodical (paper or electronic) targeted to high school students that highlights engineering activities of interest to those students. The periodical should also have articles promoting the benefits of an engineering career and what the students can do in college to get involved with IEEE.”

37. IEEE FinCom Highlights

38. 29 May IEEE FinCom Highlights
TAB Computer Society Press business collapsing
Multi-million dollar reduction in revenue
Why do we care?
Substantial reduction to IEEE revenue in 2014 Operations budget
IEEE Finance introduced concept of 5 Year Financial Plan
IEEE Budget is an annual process
Multi-year budgeting is not allowed per the FOM
Last few years characterized by decline in revenue growth AND increase in expense growth
Constrains ability to fund public imperatives

39. 29 May IEEE FinCom Highlights
First assessment of 2014 budget challenges
2014 change to Infrastructure funding and EAB
7.5% of members dues used to fund IEEE Infrastructure
7.5% reduction in available revenue to EAB, MGA, IEEE Spectrum
~$350K shortfall (~$320K in June)
Overhead rate reductions do not cover revenue reduction
MGA, EAB, Spectrum tasked with covering shortfall
Newly revised Infrastructure algorithm also falls short in covering indirect costs after accounting for 2014 Sections Congress

40. 27 June 27 IEEE FinCom Highlights
IEEE Forecast
2013
Budget
US $ (M)
Forecast
Fav/(Unfav)
Variance
Revenue
401.8
398.9
(2.9)
Expense
398.1
0.8
Net from Operations
2.9
(2.1)
Potential reserve spending as approved by the IEEE BoD/Grants
(23.9)
(19.8)
4.1
Net before Spending Rule (SR)
(21.0)
(19.0)
2.0
Dividends & Interest Income/Budgeted SR
7.1
0.0
Net Surplus/(Deficit)
(13.9)
(11.9)

41. 27 June 27 IEEE FinCom Highlights
Not included in forecast
($2.9 M) net risk
~$500 K savings in initiatives
(~$625 K) loss in overall IP sales & renewals
(~$300 K) loss in Standards sales
(~$1300 K) loss in conference revenue due to government travel
(~$300 K) loss in IEEE media on-line job site revenue
(~$750 K) expense in IEEE transfer to IEEE Foundation for HKN
(~$300 K) IT expense

42. 27 June 27 IEEE FinCom Highlights
2nd pass 2014 budget

43. 27 June IEEE FinCom Highlights
2nd pass 2014 budget
Includes Spending Rule items – reserve spending on initiatives & Foundation related activities (4.5% of reserves), and Interactive Content Project (ICP)
12/6/2018

44. 27 June IEEE FinCom Highlights
Additional requests under consideration
$2 M for 8 FTEs for TAB for Mtg Management, Tech Conferences
$2 M for TAB Future Directions communities
$3 M for IT for new projects
Various requests from other OUs
Does NOT include over-target requests from OUs
EAB top 3
EPICS
VCEP
HKN
Additional IP needs to be distributed
Purchased/Reimbursed services need to be finalized
Continue to evaluate additional requests

45. 27 June IEEE FinCom Highlights
What does this mean to EAB?
All OUs have been told that target budgets may need to be reduced
Over-target requests need to be dollarized and prioritized

47. 2012 Budget/Actual

48. EA Cost Centers
US Accreditation (23000) (ABET, APC, CEAA, CTAA)
Global Accreditation (23001) (CGAA)
EAB Board Support (23010) (ARC, N&A, OpCom/FinCom, SPC)
University Activities (23019) (UAC, RWEP)
Pre-University & TISP (23020) (PECC, ETCP)
Certification Biometrics (23021)
Products & Services (23200) (CPEC)
Educational Committees (23210) (CPEC, SEOC, SOOC)
IEEE eLearning Library (23220) (eLearning Editorial Board)
Standards Education (23345) (SEC)
Admin and Overhead (23499)
IEEE-HKN (23550) (HKN BoG)
12/6/2018

49. EA Budget 2012 2012 Budget Rev Exp Net 1,000.0 (1,000.0) 389.2 320.0
2012 Budget
Rev
Exp
Net
** Continuing Education (not in EA budget)
1,000.0
(1,000.0)
* US Accreditation (holding acct)
389.2
* IEEE eLearning (reserve acct)
320.0
Global Accreditation
320.4
(320.4)
EAB Support
662.9
(662.9)
University Activities
602.0
(602.0)
Public Education
3.0
880.3
(887.3)
Certification in Biometrics
400.0
617.0
(217.0)
Educational Product & Services
221.4
737.9
(516.5)
Educational Programs
8.7
(8.7)
Standards Education
198.5
(198.5)
Admin & O/H
4,309.8
906.4
3,403.4
IEEE-HKN
319.9
Total
5,254.1

50. EA Budget 2012 Preliminary Actuals
2012 Budget
2012 Actuals
F/(U)
Rev
Exp
Net
Fcst vs Bgt
58000
Continuing Education Investment Account
1,000.0
(1,000.0)
602.6
(602.6)
397.4
23000
* US Accreditation
389.2
379.2
349.3
29.9
23220
* IEEE eLearning
320.0
473.3
386.8
86.5
23001
Global Accreditation
320.4
(320.4)
353.8
(353.8)
(33.4)
23010
EAB Support
662.9
(662.9)
640.1
(640.1)
22.8
23019
University Activities
602.0
(602.0)
7.5
436.3
(428.8)
173.2
23020
Public Education
3.0
880.3
(887.3)
836.1
(836.1)
41.2
23021
Certification in Biometrics
400.0
617.0
(217.0)
256.6
705.2
(448.6)
(231.2)
23200
Educational Product & Services
221.4
737.9
(516.5)
82.9
741.9
(659.0)
(142.5)
23210
Educational Programs
8.7
(8.7)
23345
Standards Education
198.5
(198.5)
180.6
(180.6)
17.9
23499
Admin & O/H
4,309.8
906.4
3403.4
770.7
3539.1
135.7
23550
IEEE-HKN
319.9
191.5
257.7
(66.2)
Total
5,254.1
4848.3
4922.4
(74.1)
Not in EAB budget
restructure
USG $
Fewer purchases

51. EA Budget 2012 Summary
EA Budget was unfavorable to budget $74.1K due to the following:
Certification Revenue was less due to delays with Government contract approval by $143.4K and expenses were higher due to update of the Learning system
Products and Services had shortage of revenue from CEU/CEP Programs and other products by $142.5K
IEEE-HKN was over budget by $66.2K due to less revenue received from inductees
Infrastructure charges were higher than budgeted in all cost centers at year end.

52. 2012 New Initiatives and Grants Update
2012 Seed Grants:
Virtual Learning = $40K (closed & now in pilot phase in 2013)
IEEE eLearning focus = $40K (closed)
2012 New Initiatives & Grants:
TryComputing.org = $155K (closed and institutionalized)
English for Engineering = $70K (closed and institutionalized)
IEEE Symposium on Pre-University Teacher Training Symposium (Foundation Grant) = $35K (closed)
12/6/2018

53. 2012 New Initiatives and Grants update
2012 Grants that have been submitted for continuation in 2013:
Possible New Initiative Proposal
IEEE Science Museum Exhibits = $190K (ends 2013) year 3 of 3
Humanitarian AdHoc Committee Proposals
IEEE Implementation of High School Engineering Projects in Community Service (EPICS) = $200K
Expanding E-Scientia around the World = $230K (ends 2013 year 3 of 3
12/6/2018

54. IEEE FinCom Highlights

55. IEEE FinCom – 1 February 2013
Moderate change to contract review and signature FOM
Driven by Legal, approved by FinCom
Changes to signature level for various agreements
Delegated signing authority
Starting again the process of a 5 year financial outlook
Preliminary discussion about 2014 budget guidelines
Discussion of changes to 2014 budget process
Process left too little time for OU’s to react to budget numbers

56. IEEE FinCom – 14 February 2013
2012 IEEE Forecast

57. IEEE FinCom – 14 February 2013 2014 IEEE FinCom strategic activities
Multi-year budget process
FOM only allows 1 year view
Constrains planning capability
Part of the 5 year financial outlook
Major Project metrics review
One process missing within the IEEE is a formal ‘lessons learned’ from major projects (IBP, ICX…)
FinCom focus will start at financial metrics
Compress / Shift Budget timeline
All OU treasurers had complaints about 2012, 2013 budget timeline
Final 2013 budget rollout showed a large positive net
Too late to flow down to OU’s
Goal is to find a better process

58. IEEE FinCom – 14 February 2013 2014 Budget guidelines
Purchased / Reimbursed services included in target budget and based on 2013B plus inflationary factor
Target budget will include revenue projections from product owners
Headcount flat compared to 2013B
Salary plan, incentive plan based on EBCC recommendation
2% increase in travel expenses over 2013B (4.8% over 2012A)
IT expenses more closely coordinated with OU’s
2% inflation rate on general expenses
$ member dues increase
$1 IEEE-USA assessment increase
Regional assessments flat compared to 2013B
Bottom line target not yet identified
FOM requires zero-based budget or better