TRANSFORM PURDUEGENERAL LEDGER GO-LIVE
(7/9/2018)
Department Heads and Deans
Presented - July 30, 2018
AGENDA
Post Go-Live Assessment Finance Structure and Metrics Financial Transparency – Faculty Allocations New Scholarship Accounting Process Gift Consolidation Transfers Other Key Process Changes Q & A
2
TRANSFORM PURDUE - 21 DAYS POST GO-LIVE
3
What Has Gone Well? What are pain points?
• Major systems and interfaces worked as expected to support ongoing operational needs
• Validation of accounts pre-/post-conversion has created new transparency and understanding across central offices and business units
• Initial go-live reporting requirements have been met with updated suite of reports released
• Feedback, Incident reporting has been effective and resolution of problems is ongoing
• Training / Understanding of both system and process changes is always a challenge
• Financial postings into new account structures are a direct result of account mappings and we are finding issues that need to be resolved…
• While overall systems work we have pain experienced by users that are a result of system defects or problems that we are addressing during this stabilization period
• Perfection will take some time…..everyone is learning a new way of operating
TRANSFORM PURDUE – POST GO LIVE INCIDENT METRICSIncidents Trending in Right Direction
4
48
32
22
1
2820
9
0
19
0
10
20
30
40
50
7/8/2018 7/15/2018 7/22/2018 7/29/2018
35
2
# Incidents Reported
47
147
0
24 26
0
Logged Incidents
334
104
230
0
50
100
150
200
250
300
350
OpenResolved
# Incidents
Incidents
-69%% of Incidents
Closed (71% last week)
FINANCE STRUCTURE
5
Internal Order/Work Breakdown Structure Element (WBSE)
Cost Center
Business Areas
Segments
Campus
Purdue
WEST LAFAYETTE
PROVOST
SCIENCE
BIOLOGY
FACULTY ALLOCATIONS
Information Available
Income Statem
ent
Budget &
FTE
Balance Sheet
Available B
alance
FINANCE STRUCTURE - SIMPLIFICATION
Pre-Conversion
At Go-LiveOverall
GiftsPre/Go-Live
ScholarshipsPre/Go-Live
Valid Accounts - track operations 86,740 28,763 9,816 / 4,359 5,276 / 4,383
Funds 16,151 69Business Areas (Maj. Units) 96 70Cost Centers 9,051 1,677
Internal Orders– tracking 42,229 19,204
Faculty WBSE - tracking - 9,559 --- / 1,120 -
6
FACULTY ALLOCATIONS – DEFINITIONS OF NODES
7
Grants
• Sponsored programs tied to faculty
• Same as reported in GM AIMS
Discretionary
• Examples:• Research
discretionary• Faculty
Scholar Allocations
• Grant residuals
• Digital Education residuals
• Faculty Awards• Professorships
• No restrictions except for University policy
Start-Up
• Faculty member start-up allocations
• Plan represents the entire package
• Reporting now available for “End Date” of package
Restricted
• Examples:• Research
Seed Grant• Research Lab
Upgrade• IMPACT
Allocations• Professorships
• Use of funds limited for specific purpose or types of expenses
FINANCE STRUCTURE – FACULTY ALLOCATIONSNew Transparency for Faculty Activities
OverallFederal
Appropriations Discretionary Start-up RestrictedFaculty WBSE –Tracking
9,559 1,817 5,177 895 1,670
# Faculty with Allocations
2,789 490 2,454 592 1,110
Average # Allocations per Faculty
3.4 3.7 2.1 1.5 1.5
8
FINANCE STRUCTUREHOW DOES THE NEW STRUCTURE BENEFIT THE UNITS? The structure is now consistent across the entire Purdue System
‒ Simplifies Reporting‒ Allows for separation of Department Operating Funds and Faculty Allocations‒ Shows available/flexible funds for use at Department Head’s discretion‒ Financial information will be accessible and understandable to other business
office staff during turnover Data and reporting is available real time Response time to serve our faculty is greatly reduced
9
NEW FINANCIAL TRANSPARENCY EXAMPLESAutomated Reports/Real Time/Consistent Across Units Available Balance Listing
‒ Push Button Access‒ Financial Units and Sub-Units‒ Replaces 100s or 1000s of manual steps or excel spreadsheets‒ Clarity into who “owns” an allocation
Faculty Allocations‒ Faculty Portfolio of Balances and Activity‒ Clarity of Start-up and Professorships‒ Insights into Discretionary vs. Restricted funds
10
COLLEGE OF PHARMACY – PRE CONVERSIONAvailability of ReportingFour departments & six sub-departments
‒ 269 different cost centers
11
Availability of Reporting
Automated Manual
GLOBAL HEALTH EXAMPLE – PRE-CONVERSIONReporting is Entirely Manual
12
• Clerk exports 25 individual transaction reports from SAP to Excel • Copies and pastes account balances to a summary tab• Month-end spreadsheet emailed to program leadership
• Usually middle of the next month (if it happens)
GLOBAL HEALTH EXAMPLE – POST-CONVERSIONReporting is Automated/Available Real Time
13
• Now Real-time reporting with no manual intervention• Interactive and drillable for more granular details• Consolidated accounts by ~50%
VISIBILITY OF ACCOUNT OWNERSDepartment / Faculty Allocations – No pre-conversion visibility
14Position responsible for
account
FACULTY ALLOCATIONS – START UP
16
2 Start Up I/Os(Accounts)
Validity Date
Package Activity Plan Balance
Start up – Next Level of Detail
Faculty A
Faculty A – Start –up Ext/Engage
Faculty A – Start –up Research
Faculty A Faculty A – Ext/Egage
Faculty A – Research
FACULTY ALLOCATIONS – START UP
17
Back to the Department View – How are we funded?
Start up Package Fully Funded
Unfunded portion of Start Up
FACULTY ALLOCATIONS - PROFESSORSHIPS
18
A Step Further – What is available balance for Professorships?
Faculty A BCD
REPORTING – UPCOMING RELEASES
• Statement of Financial Activities Sep 1
• Operating Classifications• Departmental – Operating• Departmental – Allocated• Income Producing• Restricted – Gifts• State & Federal Appropriations• Student Aid
• Department Head Dashboard TBD
19
What can you expect in the future?
What units and activities are responsible for the $4.6M year-end balance for a Major Unit (College)?
Statement of Financial Activities
20
FY2017 Year-end Balance
Department NameUnrestricted to
DeptRestricted-State Line
Income Producing Scholarships Restricted Gifts Faculty Grand Total
Polytechnic Anderson $ 106,264.62 $ (222,987.17) $ 10,735.45 $ (509.02) $ (106,496.12)
Polytechnic Columbus $ 1,678.34 $ (7,025.66) $ 5,129.07 $ 6,441.49 $ 12,527.04 $ 21,583.06 $ 40,333.34
Polytechnic Indianapolis $ 2,000.00 $ 71,881.76 $ 10,000.00 $ 259.73 $ 84,141.49
Polytechnic Kokomo $ 20,283.14 $ 54,949.43 $ 6,648.51 $ 139,677.60 $ 29,733.23 $ 251,291.91
Polytechnic Lafayette $ 142,645.72 $ 52,326.16 $ (29,192.72) $ 9,433.88 $ 175,213.04
Polytechnic New Albany $ 46,697.87 $ 117,474.62 $ (5,804.85) $ 8,355.49 $ 9,557.66 $ 24,801.92 $ 201,082.71
Polytechnic Richmond $ 9,964.79 $ 87,464.97 $ 122.38 $ 23,315.68 $ 120,867.82
Polytechnic South Bend $ 28,112.30 $ 49,152.53 $ 21,864.89 $ 10,759.98 $ 312,541.75 $ 35,473.40 $ 457,904.85
Polytechnic Statewide Technology $ 35,913.08 $ 3,544,831.76 $ 3,497.00 $ (214,124.26) $ 1,432.43 $ 3,371,550.01
Polytechnic Vincennes $ 597.50 $ (54,271.39) $ 21,329.17 $ 6,093.23 $ (26,251.49)
$ 394,157.36 $ 3,693,797.01 $ 33,471.07 $ (38,031.87) $ 334,626.45 $ 151,617.54 $ 4,569,637.56
Depart. ABCDEFGH
GIFTS & SCHOLARSHIPS
21
Provost, University Development Office and Treasurer have been working on a better way to manage scholarships and gifts.
Goals ‒ Simplify account structure
‒ Effectively award and steward scholarships
‒ Maximize return on cash balances
FY 2018 Budget. $ in millions
0
5
10
15
20
25
30
35
40
45
General fundallocation
Purdue Moves EndowmentDist
Gifts Reserves Summer stateapprop
Enrollment Mgt Sources - $75.6
0
2
4
6
8
10
12
14
Colleges Sources - $19.8
Sub-optimal investment returns as cash in student aid support accounts grows
0
10
20
30
40
50
60
70
80
FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
$ in millions. System wide cash balance report. Includes scholarships and student loan funds. 2018 projected as of 4/30
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
Cash
PU Endowment 5 years
60/40 portfolio 100 years
Need for solid stewardship, efficient use of resources as UG population grows …
$2,437 $2,025 0
10000
20000
30000
40000
2016-17A 2017-18P 2018-19P 2019-20P 2020-21P 2021-22P
UG Enrollment Ave UG Scholarship
Endowed Scholarships – New process
Student Information
System (SIS)
SAP -Internal Order Tracking
Expense pushed to SAP
Endowment - PRF
Distribute cash to cover awards (1:1)
Excess distribution above expenses reinvested back
in endowment
College/Unit TrackingAward Determination @ Colleges/Units
• Units maintain role in selection of recipients and donor stewardship• Units budget up to the Endowment spending policy; actual expenses pushed
to SAP• Ensures excess cash reinvested to maximize return• Requires only 1 financial account for every Business Area (College/Unit)
• 25-30 accounts for University
Non-endowed Scholarships – New Process
• Units maintain selection and stewardship of unrestricted support account
• Requires only 1 financial account for every Academic cost center• ~250 accounts for University
Review to Determine
• Spend and close or consolidate
• Maintain until donor commitment complete
Step 1: UDO Review of Existing
Accounts
Step 2: Account Changes Fall 2018
Department Account Structure
• 1 unrestricted support account
• All income (gifts) deposited here
Step 3: Existing Cash Balances (in
accounts)
Enrollment Management (EM) and Colleges/Units
• Any Unit accounts to spend, close or consolidate – funds transferred to the unrestricted account
• Activity and cash balance in unrestricted accounts monitored annually to ensure timely use
• If not timely used, excess funds may be periodically transferred to EM or University wide quasi endowment for scholarships
GIFTS & SCHOLARSHIPS
Separate accounts for new non-endowed gift and scholarship revenues will not be created, except by approval of the VP for Development and Comptroller.‒ This does not include voluntary support (gifts restricted to faculty administered
through SPS) For new non-scholarship endowments, new support accounts will not
automatically be established by PRF.‒ Units will first be asked if they have an existing support account with the same
purpose/restrictions as the new endowment or if a new account is needed.‒ Quick responses to these questions are necessary.
28
TRANSFERS
There are significant administrative costs associated with transfers ‒Over 49,000 line items of transfers ‒ 71% of transfers line items are processed as Transfers-Other
Implementing some new guidelines will allow more transparency and allow to us gather more data around transfers‒ Example: directly transferring funds from the area funding‒ Specific transfer categories
29
TRANSFERS
30
We need assistance from Department Heads and Deans to reduce and simplify the number of transfers‒ Track meaningful activity – not nickel and dimes ‒Splitting of Sponsorships/Events by areas must be minimum $1,000
Generally speaking, transfers less than $1,000 will not be permitted except in the following circumstances:‒Conference & Residual Transfers‒ Impactful Faculty/Staff Allocations ‒Account Closing & Consolidation‒Cost Sharing
FISCAL APPROVAL & WORKFLOWSWhat will Faculty and Department Heads approve in SAP?
31
Faculty and Department Heads will approve items via electronic workflow:‒ Faculty will approve subcontract payments via electronic workflow
• Today this approval is handled via email• Faculty with active grants that have a subcontract have been notified of the process
change and the requirement for Two-Factor Authentication.
‒ No additional or significant workflow changes impacting our faculty or departments related to this. Workflow impacts will be greater with HCM project activities and will be reviewed with you separately.
FISCAL APPROVAL & WORKFLOW
32
Annual External Transactions Count Value
% of ExternalSpend
Transactions < $1,000 405,000 $75M 7%
Transactions > $1,000 65,000 $945M 93%
TOTAL 470,000 $1,020M
Fiscal Approver for <$1,000 Transactions No Longer Required• In the past we have spent the majority of the effort on a small percentage of spend
• Post – audits through standard reports will be used to review transactions
FISCAL APPROVAL & WORKFLOW Ariba Purchase Orders
‒ Requisitions < $1,000 will not require fiscal approval. • However in most departments, business office staff will still be entering orders• Non-business office users that consistently use ARIBA can continue to use ARIBA
but will be responsible for the orders‒ Other special commodity approvers will remain (regulatory and Information
Technology)‒ If a requestor cannot produce accurate POs < $1,000, the Ariba Requestor role
should be removed. Concur approval process has not changed Direct Invoice Vouchers are now routing electronically – no paper!
33