1. Budget Tracking BC Financial Healthcare Professionals Society October 4, 2010 - Concurrent Session B1 Brenda West, Fraser Health Chas Moore, Interior Health

2. 4/29/2015 Free template from www.brainybetty.com2 Why would a budget change? Annual process, three year funding letter… …but subject to perpetual change: Balanced budget directive New or changed funding Details after concept approval

3. 4/29/2015 Free template from www.brainybetty.com3 Maintaining Relevance Starts at the top…is the budget used for: –Strategic planning –Allocation of reductions and new funding –Assessing management competence Annual budget quickly becomes outdated –Rolling budgets adjusted every period –Departmental reports show adjusted budget –At least annually meet with every manager –Detailed budget to department & object code

4. 4/29/2015 Free template from www.brainybetty.com4 Rolling Departmental Budgets Creation of base budget: –Starting point is prior year’s budget –Annualize programs that changed mid-year –Reverse one-time issues in budget –Global changes: wage adjustments, inflation Budget is adjusted throughout year –Managers have discretion within their portfolio Expansion and targets held in contingency –Posted to departments as decisions made –Health care is dynamic: 400+ adjustments/period

5. 4/29/2015 Free template from www.brainybetty.com5 Why bother tracking changes? When…  Budget may be unrealistic  Managers not held accountable  Focus is on trends in actuals Because… More control = more relevance Analyzing variances is more effective Enables managers to explain Reinforce strategic objectives

6. 4/29/2015 Free template from www.brainybetty.com6 How to track budget changes? Both Fraser & Interior developed in-house Essentially a parallel general ledger Changes tracked by reason/theme Use databases that track changes to operating budgets at department level

7. 4/29/2015 Free template from www.brainybetty.com7 What level of detail is tracked? All financial & staffing statistical amounts Department and object code Theme/reason for adjustment Staffing: –hours/FTEs by job code Interior in total; Fraser by rotation –rate & step –type: regular, stat, overtime, vacation, sick, premiums Commitment, if unallocated funds eg. Interior budget lines –Financial: 34,361 accounts with budgets <>0 –Staffing: 5,060 combinations of department/job code

8. 4/29/2015 Free template from www.brainybetty.com8 How did you spend that funding? No clue –We cannot split actual spending from other transactions in department We can explain how budget was changed –Able to use budget as proxy for actuals

9. 4/29/2015 Free template from www.brainybetty.com9 Interior Health query

10. 4/29/2015 Free template from www.brainybetty.com10 Interior Health query export

11. 4/29/2015 Free template from www.brainybetty.com11 Interior Health: query export as pivot table

12. 4/29/2015 Free template from www.brainybetty.com12 Fraser Health query results

13. 4/29/2015 Free template from www.brainybetty.com13 Sample Department Staffing Summary

14. 4/29/2015 Free template from www.brainybetty.com14 How do you adjust the budget? Double entry accounting –Provide description, theme, 1x or base –Audit trail (who, when, why) Staffing linked to financial budget –Fraser: input rotation  dollar impact –Interior: input hours  dollar impact Unallocated funds use tracking number

15. 4/29/2015 Free template from www.brainybetty.com15 Fraser: Staffing Data Entry Form

16. 4/29/2015 Free template from www.brainybetty.com16

17. 4/29/2015 Free template from www.brainybetty.com17 Interior Health budget adjustment form: Funding sources for themed data extracts Indicate whether 1x or ongoing Must include staffing detail if impact 3* EOC Changes must net to zero at account level Indicate commitment if contingency account Validation routines Backup for adjustment (approvals, rotations, analysis) Explanation for entry

18. 4/29/2015 Free template from www.brainybetty.com18 Interior Health completed example

19. 4/29/2015 Free template from www.brainybetty.com19 How do you approve changes? Only Finance has access Business support works with managers & executive –Fraser: backup in hardcopy file –Interior: image of backup saved in database Revised budgets shown on statements each period Board is advised in summary –Fraser: each quarter –Interior: bimonthly

20. 4/29/2015 Free template from www.brainybetty.com20 Unallocated funds & reductions? Each initiative has tracking number Held in clearing accounts by sector Each period report unallocated funds (debits) & strategic reallocations (credits) Allocate to department as decisions made Unallocated funds linked to forecast

21. 4/29/2015 Free template from www.brainybetty.com21 Relevant budgets influence decision making …needs to be timely and accurate Give managers control over budget …they spend less time complaining about it …they feel more engaged with financials …they can use it to identify opportunities Can use budget as proxy for actuals …instead of project accounting system Simplify variance analysis …by eliminating “approved” variances Need standards for changes …when, to avoid budget chasing actuals …how, to maintain consistency & quality

22. 4/29/2015 Free template from www.brainybetty.com22 Questions?