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10/7/2013 #bbcon 1
Increasing the Value of the
Budgeting Process
10/7/2013 #bbcon 2
JENNY CHIU – VP FINANCE, LA YMCA
KATE MELVIN – DIR OF ACCOUNTING/ASST CONTROLLER,
INDIANA UNIVERSITY FOUNDATION
BRIAN WALKER – POWERPLAN/ADVANCED BUDGET
MANAGEMENT
10/7/2013 #bbcon 3
TWEET ABOUT YOUR SESSION
#BBCON
#FETRACK
# BDGFUN
@KT8IRD
10/7/2013 #bbcon 4
• Joined YMCA of Metropolitan Los Angeles
in January 2012 as Vice President of
Finance
• Prior to joining the Y, over 12+ years of
finance, accounting, operations and
management experience working in “for-
profit” sectors
• Graduated with B.S.E with concentration in
Finance and Accounting from the Wharton
School, University of Pennsylvania
GETTING TO KNOW YOUR PRESENTER,
JENNY CHIU. . .
10/7/2013 #bbcon 5
• OUR CAUSE
- The YMCA of Metropolitan Los Angeles is a volunteer-led non-profit
organization dedicated to strengthening communities through programs that
promote youth development, healthy living and social responsibility.
• OUR WIDE REACH
- The YMCA of Los Angeles has been making a positive impact in our
communities for over 130 years. Our 25 branches stretch across over 100
miles of Los Angeles County, from Antelope Valley to San Pedro. Our
membership community is 264,500 strong. Membership is open to all, with
financial assistance available to those who cannot afford it. This year, the LA
Y helped 1 out of 3 member families with financial assistance.
- We cannot do our work alone, extending our work with over 200 community
partners across the county, including schools, hospitals, clinics, cities and
other civic organizations.
YMCA OF METROPOLITAN LOS ANGELES
10/7/2013 #bbcon 6
BACKGROUND AND OVERVIEW:
WHO ARE WE & WHERE WE WERE
10/7/2013 #bbcon 7
• Association
- Non-profit organization in operation for over 130 years with annual
operating budget of $75 million
- 25 branches with a corporate support office
- Approximately 3,000 employees and 5,600 volunteers
- Historic culture of independent silo operations
• Accounting System
- Oracle based system for past 10 years until 2013
- General Ledger is now Financial Edge launched January 2013
- Budgeting Software is now Advanced Budget Management
(Powerplan) launched October 2012 (for budgeting 2013)
BACKGROUND
10/7/2013 #bbcon 8
BUDGET PROCESS
Association
Budget
Summary:
Branch
Summary: Departments
Specific Program Service
Research and Planning
• Bottom up (program level) budget approach which rolls into Association
- Oracle budget module: input monthly budget figures for revenue and
expense accounts on program level
• 25 branches each operating over 50 different programs (1,250 programs)
• Over 300 staff with fiscal management responsibilities
10/7/2013 #bbcon 9
300+ staff and 1,250+ programs:
• System limitation and lack of standardization
- All detailed budget work done outside of system on different
spreadsheets using different methodologies
• Time consuming
- Lots of preparation work required to gather historical and
researching historical information to build budgets
Association view:
• Association review process was challenging to fully understand all
the nuances of budget aside from comparison of figures to prior years
• Difficult to compare branch budgets across program areas
BUDGET CHALLENGES
10/7/2013 #bbcon 10
YEAR 2012 (YEAR OF CHANGE):
WHERE WE WANTED TO GO & WHAT WE DID
10/7/2013 #bbcon 11
• Operate as one Y
- Leverage knowledge and resources across Association to come up
with best practices for standardization
- Increase trust and transparency
• Empower and strengthen staff (program directors) in their fiscal
management skillset and help them connect their budget with our
cause
• Increase overview as an Association to identify bright spots and
opportunities to better serve our communities
OUR GOALS
10/7/2013 #bbcon 12
• Standardized “driver-based” revenue budget methodology for each
major program area to be utilized across Association
- Membership
- Childcare
- Other Programs
- Financial Development
• Collaborative implementation
- Project managed by Accounting dept with mindset of avoiding
TOP DOWN approach
- Involvement of key staff from various branches in “driver-based”
budget template development
- Involvement of TRAINING and IT depts
ROLLING OUT NEW APPROACH (NEW
SYSTEM)
10/7/2013 #bbcon 13
Membership:
• Group consisting of select branch Membership Directors along with
Accounting, Training and IT
BUDGET TEMPLATE DEVELOPMENT
1. Compiled and discussed various
budget models used across
Association
2. Consensus on proposal of
standardized model
3. IT supported in extracting data
where needed
4. Accounting created excel template
of model
5. Membership Directors tested and
provided feedback
6. Repeated steps 3-5 until satisfied
7. Training material created and
trainings led by staff
10/7/2013 #bbcon 14
BUDGET TEMPLATE DEVELOPMENT
10/7/2013 #bbcon 15
Outcomes:
• Developed robust driver-based membership model using drivers
that speak to staff (Ex: Enrollments, Cancellations, Total Units)
and also provides easy access to historical information
• Time intensive process but ultimately through this collaborative
approach, able to get buy-in and support of all Membership
Directors in using these drivers since it was developed by fellow
peers who understood their perspective
• Excel “driver-based” template
- Requires more complicated formulas
- Need to thoroughly test all formulas for accuracy
- Need to protect cells where formulas exist
- If updates made, difficult to ensure all staff are using the correct
template version
- Challenge for higher level overview / aggregation
BUDGET TEMPLATE DEVELOPMENT
10/7/2013 #bbcon 16
ADVANCED BUDGET MANAGEMENT (ABM)
10/7/2013 #bbcon 17
ADVANCED BUDGET MANAGEMENT (ABM)
10/7/2013 #bbcon 18
YEAR 2013:
WHERE WE ARE NOW
10/7/2013 #bbcon 19
Training & Development:
• Webinar trainings throughout the year based on relevancy
- Jan - Mar: Variance reporting – how to view performance and research &
document variances compared to budget and prior year
- Apr - Jun: Forecasting reiterating purpose and “driver-based” methodology
- Aug - Sep: Budgeting reiterating purpose and “driver-based” methodology
Feedback & Improvements:
• Refined reports to be more effective for branch use or association use
• Identified areas that need further training and clarification for new year
Top Management Support:
• Supportive of changes in reports and new processes
JANUARY – SEPTEMBER 2013
10/7/2013 #bbcon 20
Outcomes:
• Budget process
- Good foundation of standardized “driver-based” budget methodology in
creating more detailed, well thought out budgets by staff
- More efficient and transparent budget process and reporting with new
system ABM that provides easy access to information and aggregates
automatically
• Association overview
- All branches and corporate office speak same budget language and use
same tools
- Can better compare branches via reports with detail level to identify bright
spots and opportunities, ex. Membership Trends
• Culture
- Shift towards increased teamwork and open collaboration. Approach in
implementation which involved branch and corporate staff set example of
possibilities when we work together.
JANUARY – SEPTEMBER 2013
10/7/2013 #bbcon 21
Increasing the Value of the
Budgeting Process
PRESENTED BY CATHERINE “KATE” MELVIN
10/7/2013 #bbcon 22
• Indiana University Foundation
• Director of Accounting/Assistant Controller
• Bloomington, Indiana
• Working Budget since 1999
• Personnel & Program Budget Focus
• Annual Operating Budget of $27 Million
• Approximately 200 Employees
• General Ledger – Financial Edge
(Blackbaud)
• Budgeting Software – Advanced Budget
Management (PowerPlan)
GETTING TO KNOW YOUR PRESENTER,
CATHERINE “KATE” MELVIN . . .
10/7/2013 #bbcon 23
EVOLUTION OF THE BUDGET PROCESS
Upgrading
Technology
Changing
Approach
Moving
Forward
10/7/2013 #bbcon 24
TECHNICAL SOLUTION
ROUND 1 – “GEE, I MISS THOSE SPREADSHEETS”
10/7/2013 #bbcon 25
UPDATING TECHNOLOGY
Manual Budget Build
Top down process
Changes added globally
Months of budget work
Challenges
Budget was manually
compiled
Analysis
across organization
Reports – not useful or
timely
10/7/2013 #bbcon 26
Solution – Budget
Development Tool
Online access for
managers
Personnel budgeting
Access to updated,
actual results
Value Added
Process ownership
Updated results across
organization
Tools to manage funds
more effectively
UPDATING TECHNOLOGY
10/7/2013 #bbcon 27
CHANGING OUR APPROACH
ROUND 2 – “YOU WANT US TO DO WHAT?”
10/7/2013 #bbcon 28
CHANGING APPROACH
Budget Preparation
Forecast of actual
expenditures
Build budget for next
fiscal year
Accounting consultations
Assessment
Templates completed for
management review
New requests and
budget cuts
Conferences with senior
management
10/7/2013 #bbcon 29
Challenges
Compressed timeline
New levels of scrutiny
Confidence in the
process
Impact
Strategic decision
making
Information exchange
Improved reporting and
analysis
CHANGING APPROACH
10/7/2013 #bbcon 30
MOVING FORWARD
10/7/2013 #bbcon 31
What’s Next?
FY2015 changes
Process updates
Rolling forecasts/Zero
based budget?
Take Me Home
Education
Engagement
Energy
MOVING FORWARD
10/7/2013 #bbcon 32
THANK YOU FOR YOUR INTEREST!
HAVE A GREAT DAY!!
Education
Engagement
Energy

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Increasing the Value of the Budgeting Process

  • 1. 10/7/2013 #bbcon 1 Increasing the Value of the Budgeting Process
  • 2. 10/7/2013 #bbcon 2 JENNY CHIU – VP FINANCE, LA YMCA KATE MELVIN – DIR OF ACCOUNTING/ASST CONTROLLER, INDIANA UNIVERSITY FOUNDATION BRIAN WALKER – POWERPLAN/ADVANCED BUDGET MANAGEMENT
  • 3. 10/7/2013 #bbcon 3 TWEET ABOUT YOUR SESSION #BBCON #FETRACK # BDGFUN @KT8IRD
  • 4. 10/7/2013 #bbcon 4 • Joined YMCA of Metropolitan Los Angeles in January 2012 as Vice President of Finance • Prior to joining the Y, over 12+ years of finance, accounting, operations and management experience working in “for- profit” sectors • Graduated with B.S.E with concentration in Finance and Accounting from the Wharton School, University of Pennsylvania GETTING TO KNOW YOUR PRESENTER, JENNY CHIU. . .
  • 5. 10/7/2013 #bbcon 5 • OUR CAUSE - The YMCA of Metropolitan Los Angeles is a volunteer-led non-profit organization dedicated to strengthening communities through programs that promote youth development, healthy living and social responsibility. • OUR WIDE REACH - The YMCA of Los Angeles has been making a positive impact in our communities for over 130 years. Our 25 branches stretch across over 100 miles of Los Angeles County, from Antelope Valley to San Pedro. Our membership community is 264,500 strong. Membership is open to all, with financial assistance available to those who cannot afford it. This year, the LA Y helped 1 out of 3 member families with financial assistance. - We cannot do our work alone, extending our work with over 200 community partners across the county, including schools, hospitals, clinics, cities and other civic organizations. YMCA OF METROPOLITAN LOS ANGELES
  • 6. 10/7/2013 #bbcon 6 BACKGROUND AND OVERVIEW: WHO ARE WE & WHERE WE WERE
  • 7. 10/7/2013 #bbcon 7 • Association - Non-profit organization in operation for over 130 years with annual operating budget of $75 million - 25 branches with a corporate support office - Approximately 3,000 employees and 5,600 volunteers - Historic culture of independent silo operations • Accounting System - Oracle based system for past 10 years until 2013 - General Ledger is now Financial Edge launched January 2013 - Budgeting Software is now Advanced Budget Management (Powerplan) launched October 2012 (for budgeting 2013) BACKGROUND
  • 8. 10/7/2013 #bbcon 8 BUDGET PROCESS Association Budget Summary: Branch Summary: Departments Specific Program Service Research and Planning • Bottom up (program level) budget approach which rolls into Association - Oracle budget module: input monthly budget figures for revenue and expense accounts on program level • 25 branches each operating over 50 different programs (1,250 programs) • Over 300 staff with fiscal management responsibilities
  • 9. 10/7/2013 #bbcon 9 300+ staff and 1,250+ programs: • System limitation and lack of standardization - All detailed budget work done outside of system on different spreadsheets using different methodologies • Time consuming - Lots of preparation work required to gather historical and researching historical information to build budgets Association view: • Association review process was challenging to fully understand all the nuances of budget aside from comparison of figures to prior years • Difficult to compare branch budgets across program areas BUDGET CHALLENGES
  • 10. 10/7/2013 #bbcon 10 YEAR 2012 (YEAR OF CHANGE): WHERE WE WANTED TO GO & WHAT WE DID
  • 11. 10/7/2013 #bbcon 11 • Operate as one Y - Leverage knowledge and resources across Association to come up with best practices for standardization - Increase trust and transparency • Empower and strengthen staff (program directors) in their fiscal management skillset and help them connect their budget with our cause • Increase overview as an Association to identify bright spots and opportunities to better serve our communities OUR GOALS
  • 12. 10/7/2013 #bbcon 12 • Standardized “driver-based” revenue budget methodology for each major program area to be utilized across Association - Membership - Childcare - Other Programs - Financial Development • Collaborative implementation - Project managed by Accounting dept with mindset of avoiding TOP DOWN approach - Involvement of key staff from various branches in “driver-based” budget template development - Involvement of TRAINING and IT depts ROLLING OUT NEW APPROACH (NEW SYSTEM)
  • 13. 10/7/2013 #bbcon 13 Membership: • Group consisting of select branch Membership Directors along with Accounting, Training and IT BUDGET TEMPLATE DEVELOPMENT 1. Compiled and discussed various budget models used across Association 2. Consensus on proposal of standardized model 3. IT supported in extracting data where needed 4. Accounting created excel template of model 5. Membership Directors tested and provided feedback 6. Repeated steps 3-5 until satisfied 7. Training material created and trainings led by staff
  • 14. 10/7/2013 #bbcon 14 BUDGET TEMPLATE DEVELOPMENT
  • 15. 10/7/2013 #bbcon 15 Outcomes: • Developed robust driver-based membership model using drivers that speak to staff (Ex: Enrollments, Cancellations, Total Units) and also provides easy access to historical information • Time intensive process but ultimately through this collaborative approach, able to get buy-in and support of all Membership Directors in using these drivers since it was developed by fellow peers who understood their perspective • Excel “driver-based” template - Requires more complicated formulas - Need to thoroughly test all formulas for accuracy - Need to protect cells where formulas exist - If updates made, difficult to ensure all staff are using the correct template version - Challenge for higher level overview / aggregation BUDGET TEMPLATE DEVELOPMENT
  • 16. 10/7/2013 #bbcon 16 ADVANCED BUDGET MANAGEMENT (ABM)
  • 17. 10/7/2013 #bbcon 17 ADVANCED BUDGET MANAGEMENT (ABM)
  • 18. 10/7/2013 #bbcon 18 YEAR 2013: WHERE WE ARE NOW
  • 19. 10/7/2013 #bbcon 19 Training & Development: • Webinar trainings throughout the year based on relevancy - Jan - Mar: Variance reporting – how to view performance and research & document variances compared to budget and prior year - Apr - Jun: Forecasting reiterating purpose and “driver-based” methodology - Aug - Sep: Budgeting reiterating purpose and “driver-based” methodology Feedback & Improvements: • Refined reports to be more effective for branch use or association use • Identified areas that need further training and clarification for new year Top Management Support: • Supportive of changes in reports and new processes JANUARY – SEPTEMBER 2013
  • 20. 10/7/2013 #bbcon 20 Outcomes: • Budget process - Good foundation of standardized “driver-based” budget methodology in creating more detailed, well thought out budgets by staff - More efficient and transparent budget process and reporting with new system ABM that provides easy access to information and aggregates automatically • Association overview - All branches and corporate office speak same budget language and use same tools - Can better compare branches via reports with detail level to identify bright spots and opportunities, ex. Membership Trends • Culture - Shift towards increased teamwork and open collaboration. Approach in implementation which involved branch and corporate staff set example of possibilities when we work together. JANUARY – SEPTEMBER 2013
  • 21. 10/7/2013 #bbcon 21 Increasing the Value of the Budgeting Process PRESENTED BY CATHERINE “KATE” MELVIN
  • 22. 10/7/2013 #bbcon 22 • Indiana University Foundation • Director of Accounting/Assistant Controller • Bloomington, Indiana • Working Budget since 1999 • Personnel & Program Budget Focus • Annual Operating Budget of $27 Million • Approximately 200 Employees • General Ledger – Financial Edge (Blackbaud) • Budgeting Software – Advanced Budget Management (PowerPlan) GETTING TO KNOW YOUR PRESENTER, CATHERINE “KATE” MELVIN . . .
  • 23. 10/7/2013 #bbcon 23 EVOLUTION OF THE BUDGET PROCESS Upgrading Technology Changing Approach Moving Forward
  • 24. 10/7/2013 #bbcon 24 TECHNICAL SOLUTION ROUND 1 – “GEE, I MISS THOSE SPREADSHEETS”
  • 25. 10/7/2013 #bbcon 25 UPDATING TECHNOLOGY Manual Budget Build Top down process Changes added globally Months of budget work Challenges Budget was manually compiled Analysis across organization Reports – not useful or timely
  • 26. 10/7/2013 #bbcon 26 Solution – Budget Development Tool Online access for managers Personnel budgeting Access to updated, actual results Value Added Process ownership Updated results across organization Tools to manage funds more effectively UPDATING TECHNOLOGY
  • 27. 10/7/2013 #bbcon 27 CHANGING OUR APPROACH ROUND 2 – “YOU WANT US TO DO WHAT?”
  • 28. 10/7/2013 #bbcon 28 CHANGING APPROACH Budget Preparation Forecast of actual expenditures Build budget for next fiscal year Accounting consultations Assessment Templates completed for management review New requests and budget cuts Conferences with senior management
  • 29. 10/7/2013 #bbcon 29 Challenges Compressed timeline New levels of scrutiny Confidence in the process Impact Strategic decision making Information exchange Improved reporting and analysis CHANGING APPROACH
  • 31. 10/7/2013 #bbcon 31 What’s Next? FY2015 changes Process updates Rolling forecasts/Zero based budget? Take Me Home Education Engagement Energy MOVING FORWARD
  • 32. 10/7/2013 #bbcon 32 THANK YOU FOR YOUR INTEREST! HAVE A GREAT DAY!! Education Engagement Energy