1. Midyear Forecasting March/April 2019
Thank you for coming, and welcome to the second in our series of seminars on financial management!
Bryan Brown (Arts and Humanities liaison)
Luba Petrov (Humanities liaison)
John Murphy (Social Sciences liaison)
Shuming Yao (filling in for Jackie Buchanan as Natural Sciences liaison)
Jiayan Zhao (Assistant Director of Finance)
Elsie Phillips (Senior Finance Analyst)
Kristi Nishihara (Senior Finance Analyst)
Harvey Chock (Senior Finance Analyst)
Winne Wang (Senior Finance Analyst)
Jim Henry (Director of Finance)
March/April 2019

2. Midyear Forecasting Agenda
Introductions (5 min)
Previous Session Reminders (5 min)
Context and Purpose(s) for a Midyear Forecast (10 min)
Best Practices for Accurate Data (5 min)
Process and Examples (55 min)
What Does It All Mean? (10 min)
Open Lab (30 min)
Process will start at a high level, and then John will do the majority of the heavy-lifting with a dive down into the details

3. Midyear Forecasting Reminders from Previous Session
Focus was on:
Executive Summaries/Financial Narratives
Determining your audience
Determining your scope
Understanding the annual accounting cycle
Different reporting tools and what data they contain (pros and cons)
Prior period data (i.e, mostly reporting on the past)
In our first session, we threw a lot of information at you:
Audience: Department Chairs/Program Directors? Advisory Boards? Deans?
Scope: Am I looking into the Past? Present? Future? Faculty Accounts? Department/Program Accounts only?
Accounting Cycle: Produce a budget, fund the budget, spend/bring in funding, midyear forecast, spend some more/bring in some more funding, yearend forecast, close the year, take a snap-shot, rinse and repeat
Different Reports: FFIT, OBI OB and Non-OB Reports, Multi-Year Trend Report from OBI, Department Reserves
At your recommendation, we produced a follow-up Reporting Matrix with Pros and Cons (Accounting Cycle is in progress)
In this session, we will take a closer look at some of the OBI reports and how they might help provide useful information to you and your audience

4. Midyear Forecasting Context
Where are we in the accounting cycle?
Budgeted last July
Funded the Budget, including 9/1 commitments in September/October
Spent for half the fiscal year
Transferred many mid-year funding commitments and possibly brought in additional funding
Are we on track so far for the year (past-looking)?
Are we on track for year-end (forward-looking)?
Where are we anyway?
Some funding commitments may still be outstanding, especially if they are from outside the School; talk to your liaison if you have HSDO funding commitments that can be met at this time. It’s good to get the funding in place sooner rather than later to make your yearend forecasting easier.
Shift from past-looking to forward-looking

5. Midyear Forecasting Purpose(s)
To determine whether you are overspending (and whether you have sufficient reserves to cover the overspending)
To determine whether you have sufficient funding to support incremental activities
One-Time Activities vs. Ongoing Activities
To determine your year-end fund balance status and compare to prior year balances
Why are reserve levels trending the way they are?
Are you sustainable?
Are you building reserves for a rainy day to ensure future sustainability?
Incremental Activities:
Help to inform Chair/Director decisions about “Can I do X?”
If you have sufficient funding to do X, is it just because of circumstances this year (one-time)? Or will it be every year (ongoing)?
When completing a midyear forecast, be sure to highlight your assumptions so that you will know the “why” of why reserve levels are doing what they are doing and can then address the question of sustainability or future rainy days

6. Midyear Forecasting Best Practices for Accurate Data
Transactions have been entered and approved in a timely fashion
Expenditures have been reconciled and reviewed prior to forecasting
Outstanding Oracle expenditure commitments have been reviewed and suppressed (if appropriate)
Labor schedules are also accurate through the end of the year
Outstanding funding commitments have been gathered from HandSOn
Timely: If transaction entry and approval lags too much, it may be difficult to determine burn rates for the remainder of the year
Reconciled: Make labor adjustments, changes to labor schedules, org suspense clearings, and iJournal corrections where necessary and as soon after the error occurred as possible!
Commitments: Oracle expenditure commitments include only base salaries (bargaining unit and other hourly employees excluded) and purchase order commitments. Talk to your liaison if you are uncertain how to suppress outstanding commitments

7. Midyear Forecasting Process Overview
Download reports
Enter anticipated revenue
Outstanding HandSOn funding commitments
Anticipated gifts or designated revenue
Enter or modify anticipated expenses
Specific Oracle expenditure commitments
Include burn rate when appropriate
Determine end-of-year remaining balance in each PTA
OB then Non-OB
Non-OB: Know how your OB PTAs are funded so you know where to move year-end surplus or deduct for overdrafts
Consolidate information into projected reserve report(s)
Analyze and summarize
At a high level, six steps.
Burn rate may be calculated by examining current or prior year trends; you may need to examine expenditure details if there are any anomalies that stand out
Recommend that you start with OB (primarily expenditures but some additional funding), then move to non-OB (mostly funding and some limited expenditures + year-end close transactions)

8. Midyear Forecasting Process Outline
Create Worksheets
Enter Projections
Review Results

9. Midyear Forecasting Process Outline
Create and Enter Projections in 3 Worksheets
Projecting Year-End OB Funding and Expenditures
Projecting Year-End Non-OB Fund Balances
Reviewing Non-OB Fund Balance Multi-Year Trend

10. Midyear Forecasting Process Outline
Project OB Funding & Expenditures
Additional funding and outstanding commitments
Remaining expenditures and transfers out
Project Non-OB Fund Balances
Additional Non-OB revenue
OB funding adjustments
Review Non-OB Multi-year Balances
Add projected Non-OB balance
Compare projected fund balances by Award

11. Midyear Forecasting 1. Projecting Year-End OB Funding and Expenditures
Create Worksheet
Using Browser
Navigate to H&S Financial Dashboard in OBI
Open OB Fund Balance Review
Enter Award Number = OB Award and Fiscal to Date GL Period Name = FEB-2019
Export to and open with Excel
Using Excel
Add three columns:
Additional Funding (R)
Remaining Expenditures and Transfers Out (S)
Projected Balance (T)
Enter formula for Projected Balance (T)
= YTD Available Balance (N) + Additional Funding (R) - Remaining Expenditures and Transfers (S)

12. Midyear Forecasting 1. Projecting Year-End OB Funding and Expenditures
Enter Projections
Additional Funding
Outstanding funding commitments
HandSOn for HSDO and PPO
Other schools and departments
Drill down to investigate details in OBI or FFIT
Remaining Expenditures and Transfers Out
Projection methodologies (projection methodology will vary by PTA)
Expenditure commitments
YTD annualized
Prior year actuals
Current Year Budget
“Proof of Concept” H&S OBI projection tool

13. Midyear Forecasting 1. Projecting Year-End OB Funding and Expenditures
Review Results
Where OB PTA has a surplus,
How was this PTA funded?
Can all or a portion of the surplus be returned to your Non-OB fund(s)?
Will any of the surplus be required to fund OB PTA deficits?
Where OB PTA has a deficit,
Will all or a portion of the deficit be funded from your Non-OB funds?
These decisions will impact the projected Non-OB fund balances

14. Midyear Forecasting Process Outline
Project OB Funding & Expenditures
Additional funding and outstanding commitments
Remaining expenditures and transfers out
Project Non-OB Fund Balances
Additional Non-OB revenue
OB funding adjustments
Review Non-OB Multi-year Balances
Add projected Non-OB balance
Compare projected fund balances by Award

15. Midyear Forecasting 2. Projecting Year-End Non-OB Fund Balances
Create Worksheet
Using Browser
Navigate to H&S Financial Dashboard in OBI
Open Non-OB Fund Balance Review
Enter Organization = Org Code and Fiscal to Date GL Period Name = FEB-2019
Export to and open with Excel
Using Excel
Add four columns:
Additional Revenue (Q)
Remaining Expenditures and Transfers Out (R)
OB Funding Adjustments (S)
Projected Balance (T)
Enter formula for Projected Balance (T)
= YTD Available Balance (L) + Merged Pool Remaining Payout (M) + Additional Revenue (Q) - Remaining Expenditures (R) + OB Funding Adjustments (S)

16. Midyear Forecasting 2. Projecting Year-End Non-OB Fund Balances
Enter Projections
Additional Non-OB Revenue
Designated income
Gift pledge payments
Remaining Expenditures and Transfers Out
OB Funding Adjustments
Projected Balance from Projecting Year-End OB Funding and Expenditures
Review funding sources when projecting pullback of surplus
Determine funding sources when projecting funding of deficit

17. Midyear Forecasting 2. Projecting Year-End Non-OB Fund Balances
Analyze Results
Where the Non-OB fund balance is in deficit,
Is the deficit the result of overfunding your OB from this source?
If so, what is the impact on OB PTAs when this funding source is reversed or partially reversed to resolve the deficit?
Will all or a portion of the deficit be funded from your other Non-OB funds?

18. Midyear Forecasting Process Outline
Project OB Funding & Expenditures
Additional funding and outstanding commitments
Remaining expenditures and transfers out
Project Non-OB Fund Balances
Additional Non-OB revenue
OB funding adjustments
Review Non-OB Multi-year Balances
Add projected Non-OB balance
Compare projected fund balances by Award

19. Midyear Forecasting 3. Reviewing Non-OB Multi-Year Fund Balance Trend
Create Worksheet
Using Browser
Navigate to H&S Financial Dashboard in OBI
Open Department Reserve Reports
Select Reserves tab
Enter Award Org Name and Fiscal Year Between
Export to and open with Excel
Using Excel
Add one column:
2019 (I)
Enter formula for Grand Total
= sum(i7:i28) * adjust depending on number of rows and if also adding subtotals by category

20. Midyear Forecasting 3. Reviewing Non-OB Multi-Year Fund Balance Trend
Enter Projections
By Award, add Projected Balance from Year-End Non-OB Fund Balance worksheet to the new column 2019
Analyze Results
Compare projected 2019 fund balances by award, by category, and in total, to prior years balances

21. Midyear Forecasting 3. Reviewing Non-OB Multi-Year Fund Balance Trend
Analyze Results

22. Midyear Forecasting Analyze Fund Balance Trend
What Does It All Mean?