UCL Finance Reporting Project

1. UCL Finance Reporting Project UCL Finance Reporting Project Business Objects Planning (BOP) Rollout Training Group 2 20 Aug – 1 Sept 2008 CRH v1.0

2. UCL Finance Reporting Project BOP Rollout Training Session Presenters: Ian Davis, Management Accountant (RAM & Systems) Caroline Hibbs, Assistant Director (PMA) Training Session Support: Jonathan Thompson, Project Manager Session Duration: 09.30 to 13.00, Tea/Coffee Break: 11.00 Location: Training Room, Second Floor UCL Union Huntley Street Slide 1

3. UCL Finance Reporting Project BOP Rollout Training Group 2 Participating Departments Slide 2

4. UCL Finance Reporting Project BOP Rollout Training Today’s objectives are threefold: • to introduce the Financial Reporting Project to departments • to introduce the reporting calendar • to look in detail at the standard quarter update process • to explain the role and responsibilities of departments in the process • to introduce the Business Objects Planning tool and BOP Workbooks • to equip department users with the basic skills and knowledge to participate in this controlled reporting update process • to provide an initial training forum for users to practice, ask questions, get answers, clarify understanding • to inform departments and elaborate on other developments, changes and enhancements to existing financial processes • to open a dialogue with departments Slide 3

5. UCL Finance Reporting Project BOP Rollout Training The order of the morning looks something like this: • Overview of Financial Reporting Project, Reporting Process and Roll-Out. • refer to slide pack (pages 5 to 13). • Intro to Business Objects Planning (BOP) and an initial walk around the BOP Workbooks. • refer to slide pack (pages 15 to 18). • Talk through what will be required from departments • refer to slide pack (pages 19 to 21). • Hands-on practice and walk through of the various data entry processes, introduce new budget journal process, illustrate worksheet validation rules and process control management • refer to BOP Training Manual, slide pack (pages 22 to 23). • Illustrate BOP report outputs and current suite of reports • refer to BOP Training Manual. • Session wrap-up • Feedback (slide page 24), Top 10 Tips, BOP Instructions • refer to slide Appendices (pages A1 – A12), Training Manual Slide 4

6. UCL Finance Reporting Project Project Objectives and Department Benefits The primary objectives of the Financial Reporting Project are: • to implement a robust, integrated and automated reporting system capable of producing regular and accurate financial management information on which our business decisions can be based • to facilitate the strengthening of financial routines, account management processes and reporting responsibilities at department level • to introduce improved collection, preparation and review processes for budget, forecast and actual data For departments this brings: • access to more accurate and timely reports of divisional and departmental activities • improved control at divisional and departmental level of use of available funds • forecasting and future year planning undertaken in a controlled environment Slide 5

7. UCL Finance Reporting Project Project Overview Feb 2007 System Specification Implementation Initial System Design and Testing Communications Strategy Revision of Period End Financial Processes Pilot 1 FRP User Group Revision of Account Code Creation & Maintenance Process FRP User Consultation Group Pilot 2 FRP Website Department Roll-Out Review and Cleansing of Chart of Accounts FAQs Group 2 Group 1 Newsletters Group 4 Group 3 Group 5 Dec 2008 Slide 6

8. UCL Finance Reporting Project Introduction to Reporting Update Processes We take a look at… How the reporting processes fit together over the annual period (Slide 7) Annual Reporting Calendar Standard Data Update Processes Introducing the various data update processes and how they fit together over a reporting period (Slide 8) Standard Budget/Forecast Update Process What happens in a budget/forecast update process and how departments fit into the process (Slide 9) Roll-Out of Reporting Processes How your department is brought into the reporting processes (slide 10-12) Slide 7

9. UCL Finance Reporting Project Annual Reporting Calendar Example JAN AUG SEPT OCT NOV DEC FEB MAR APR MAY JUN JUL Quarterly Forecast Process Prepare Q1 Forecast Prepare Q2 Forecast Prepare Q3 Forecast 2+10 5+7 8+4 Budget Process Prepare Budgets Consolidate & Finalise Budgets Period End Reporting Prepare YE Accounts Finalise Year End Accounts Prepare End Q1 Reports Prepare End Q2 Reports Prepare End Q3 Reports Prepare End Q4 Adjts End Q1 Update End Q2 Update End Q3 Update, Budget Sign Off SMT Year End Accounts Approval End Q2, Hefce Grant Budget Approval Finance Committee Slide 8

10. UCL Finance Reporting Project Standard Data Update Processes STANDARD QUARTER PERIOD Start of New Quarter MONTH 3 OF QUARTER PERIOD QUARTERLY FORECAST UPDATE MTH 2 MTH 2 WEEK 1 WEEK2 WEEK 3 WEEK 4 MTH 1 Workbooks MTH 1 Departments enter forecasts, allocation, reserve adjustments Entry Depts Departments update forecasts, allocations, reserve adjustments on individual accounts as required Departments update forecasts, allocations, reserve adjustments on individual accounts as required In Year Adjustments Depts Allocations & Reserves Faculties Finance/Faculties enter allocations, transfers of reserves for upload to department accounts Slide 9

11. UCL Finance Reporting Project Standard Budget/Forecast Update Process Budgeting Process Auto- Populate BOP Templates with Future Year Budget Approve BOP Budget/ Forecasts Upload BOP Budget/ Forecasts to FIS FINANCE Issue Budget/ Forecast Entry Templates To Faculties/ Departments Forecasting Process Auto- Populate BOP Templates with Period To Date Actuals Review & Amend Income and Expenditure Budgets/ Forecasts Review/ Approve Dept Templates Return Approved Templates to PMA FACULTY Review & Amend Income and Expenditure Budgets/ Forecasts Return Dept Approved Templates to Faculty DEPT Slide 10

12. UCL Finance Reporting Project Roll-Out of Reporting Processes What we want you to do now …. Review/amend the 2008-09 Budget baseline positions for your designated range of accounts in the light of latest data and other local information AUGUST 2008 If you have time, you can review forward budgets in the light of your 2008-09 changes You’ll be provided with the following data for each account… Variance 2008-09 Budget to 2007-08 Forecast 2006-07 ACTUAL 2007-08 BUDGET 2007-08 FORECAST 2008-09 BUDGET 11 mths Actuals + 1 mth Budget + 3% August 07 – June 08 + 3% July 07 + 6% The 2008-09 Faculty Allocation will be pre-loaded to the department recurrent grant accounts. The data you enter will be loaded into FIS as your 2008-09 budgets for the new budget year. Slide 11

13. UCL Finance Reporting Project Roll-Out of Reporting Processes cont. And then in …. OCTOBER 2008 The Q1 Forecast Update process begins following the September 08 month end, likely to be closed by Friday 3RD October. You will be required to carry out the following: • Review 2008-09 Budgets • Review 2008-09 Actuals To Date (2 months) • Revise 2008-09 Forecasts The Q1 Forecast Update will involve the departments who participated in the 2 pilots and departments of Roll-Out Groups 1 and 2. Slide 12

14. UCL Finance Reporting Project Roll-Out of Reporting Processes: Group 2 Timetable Roll-Out Preparation Departments Training Sessions Wednesday 20th August to Monday 1st September 2008 Not Applicable for Group 2 FIS Month End Closure Date Friday 5th September 2008 BOP Workbooks Build Process Roll-Out Update Process 3 weeks in total Department Entry & Approval Process Monday 8th Sept to Tuesday 16th Sept 2008 7 working days First Level/Faculty Review & Approval Process 5 working days Wednesday 17th Sept to Tuesday 23rd Sept 2008 Second Level/Finance Review & Approval Process Wednesday 24th Sept to Friday 26th Sept 2008 3 working days Represents the maximum time allocated to the department process and not the amount of time required to undertake process actions Slide 13

15. UCL Finance Reporting Project Introducing Business Objects Planning: • logging on and logging off • opening and exiting from a workbook • navigating around the workbook • entering and saving data and comments • entering new accounts • selecting and changing standard planning methods • entering worksheet allocation and reserve adjustments • printing workbooks • approving the workbook and submitting to the next stage of approval • actioning in year adjustments Slide 14

16. UCL Finance Reporting Project Summary Worksheet The summary worksheet is a view-only worksheet, displaying the following summaries of the entry worksheet data: • Summary by Source Total • Summary by Account Total by Source Total Entry Worksheet Templates The entry worksheet displays a series of standard templates, one per account code. The account templates are ordered as follows: • By Budget Manager • By Source The account template has a number of standard rows which apply to all accounts (Slide 15), relating to the following fields of the ledger: • the budget field (brought forward reserves and reserve adjustments). • the primary expenditure fields (staff costs, other operating costs, capital transactions). The account template displays additional rows for those accounts which record income or receive allocations as their source of funds (Slide 15). The columnar format of the account template is standard for all accounts displayed. The cell formats of the worksheet are fixed and cannot be changed by users. Slide 15

17. UCL Finance Reporting Project Entry Worksheet Row Formats The account template contains a number of standard rows which apply to all accounts: The following additional rows appear for qualifying accounts and sources only: Slide 16

18. UCL Finance Reporting Project Materiality A material account is one which has: • a brought forward balance of > £50k OR • an allocation of > £50k OR • annual income of > £20k OR • a brought forward deficit balance of > £5k. If an account fulfils any one of the above criteria, then the account is flagged GREENand the materiality label isYES at the top of the account.An account can become material when data entered by departments meets any one of the materiality criteria. To note: Expenditure does not determine whether an account is material as any expenditure entry is always deemed to be matched by either or a combination of the 3 key materiality criteria - reserves brought forward, allocation, and annual income. Slide 17

19. UCL Finance Reporting Project Income Row Formats Account income is shown by summary analysis group. Each analysis group has been mapped to one or more source codes. The source code of the account determines therefore which income lines appear in the account template. Income recorded against an analysis group that is not linked to the account source code, will be shown under a separate line called Income Exception. No forecast data can be input against this line. (see A6) Slide 18

20. UCL Finance Reporting Project Department Actions Data Updates (Slide 19) The source code of each department account will determine the type of income and expenditure forecast update required. Expenditure only updates are required for budget accounts, accounts funded by central distributions, and department reserve accounts. Income and direct expenditure updates are required for the remaining department activities. Funds Adjustments (Slide 20) Departments will be responsible for entering adjustments to account reserves and allocations in line with the current source code framework rules. Validation rules have been built into the Entry Worksheet accordingly. Finance and Faculty Offices retain responsibility for populating the allocation fields and for actioning reserve adjustments of accounts whose activities are ring-fenced or subject to special funding arrangements. Control Accounts All department control accounts (Budget, Research, and Balance Sheet) are excluded from department workbooks. Faculty Offices and Finance retain responsibility for populating the Budget and Research Activity income and expenditure control accounts for each Faculty. Slide 19

21. UCL Finance Reporting Project Budget/Forecast Processes: Data Update Actions by Departments Source code with more than one type of data update action Slide 20

22. Allocations and Reserve Adjustments UCL Finance Reporting Project The Table below sets out the budget field entries and who is responsible for populating these fields Slide 21

23. UCL Finance Reporting Project Introducing Ownership and Process Control Every update process performed by departments, whether part of the formal quarterly reporting update or outside of this, is underpinned by the principles of ownership and control The BOP Update process has 4 key stages: • Department Entry • Department Approval • Faculty Approval • Finance Approval Each stage must be assigned to an owner and allocated a due date for completion The owner is responsible for ensuring that that the stage, comprising an entry and/or approval process, is completed by the due date Once the stage is completed, the owner is required to advance the ownership of the process to the next stage and to the next owner Control is maintained throughout the process by… • restricting write-access to the owner of the current stage • a history log that tracks progress through the stages • a system override facility for Finance to enable a change of owner and change of stage to take place to meet the due completion dates Slide 22

24. UCL Finance Reporting Project Process Control TIME OWNER STAGE CONTROLS Working Day 1 Finance Build of Workbooks Release Working Days 2-8 Department Entry Advance Override Workbook History Log Advance Return Workings Day 9-13 Faculty Approval Process Control Manager Advance Return Working Days 14-16 Finance Approval Overnight Day 16 Finance FIS Upload Slide 23

25. UCL Finance Reporting Project Problems during the Roll-Out For both practical help on using the workbook and for problems such as accessing, data corruption, data views, and staff absences, you can contact… • BOPsupport@ucl.ac.uk • call the BOP support phone number – ext 48336. Feedback on the Roll-Out: A feedback template will also be issued to users at the start of the roll-out and departments are asked to record… • any problems encountered with the workbook, the process both within and outside BOP • any suggestions in respect of process improvements • any other issues arising from the process. Slide 24

26. UCL Finance Reporting Project List of Appendices – Supplementary Training Material

27. UCL Finance Reporting Project UCL OPERATING BUDGET AND RAM UCL accounts are categorised into two primary groups, those that are part of the UCL Operating Budget and those that are deemed to be self-financing activities. The Operating Budget comprises the primary income and expenditure streams of UCL: • Income: Hefce grant, Academic Fees, Research and Other Overhead Recoveries, Property income, Interest receivable • Expenditure: Core Staff Salaries, Estate maintenance, Other Property costs, Interest payable. • Budget activity is recorded in accounts set up under Source 0. The Operating Budget also shows as a charge on its income the amount of additional allocations to Academic and CSS departments to support operational activities. These are allocated to department accounts under Source 1. The RAM allocates and analyses the primary income and expenditure streams and cash costs across the Academic departments. Matching income and expenditure estimates for department self-financing activities are also included in the UCL RAM. The RAM report data is compiled from budgets and forecasts produced by Finance and the Faculty Officers. The budget/forecast data in respect of self-financing activities is compiled at a summary level only. Budget Update Responsibilities Departments are not responsible for updating the RAM/Operating Budget positions reported under Source 0 accounts or for updating the allocation sums under Source 1. These are the responsibilities of the Faculty Offices. Departments are only responsible for ensuring that the allocation sums are properly re-allocated to accounts within the department Source 1 range and for budgeting and forecasting the annual expenditure to be incurred against these funds. Departments will be responsible for the majority of the budgeting and forecasting of their self-financing activities recorded outside of Source 0 and 1. A1

28. UCL Finance Reporting Project BOP PRE-POPULATED BUDGET DATA: Budget Control Accounts The table below details how the BOP budget data has been derived for UCL Budget/RAM department control accounts which are reported under Source 0 and details the actions required by the Faculties during the Budget/Forecast update process. Research activity recorded in detail in the Research Projects Ledger is imported on a monthly basis into the General Ledger Department Control Accounts under Source A. Responsibility for reviewing and amending these positions lies with the Faculty Offices. The budget data for this activity has been derived as follows: Direct Income and Direct Expenditure FMA Review and Amend with reference to detailed grant data provided by Research Services 2008-09 RAM Budget allocated on PY Actuals basis A2

29. UCL Finance Reporting Project BOP PRE-POPULATED BUDGET DATA: Non-Budget Activities – 2007-08 The table below details the 2 methods used to derive the 2007-08 BOP budget data and how they apply to the range of department self-financing source codes A3

30. UCL Finance Reporting Project PRE-POPULATED BUDGET DATA: Non-Budget Activities - 2008-09 and future years The table below details how the future year BOP budget data is derived for the range of department self-financing source codes A4

31. UCL Finance Reporting Project Reserve Adjustments BOP Forecast Process Each account template in the Entry workbook shows the account reserves broken down into the following: • the brought forward reservesas at the start of the financial year, • the postedreserves, adjustments approved in previous updates of the current period, • the reserve adjustments, adjustments to be approved in the current update process. Departments are able to increase or decrease the overall account reserves, i.e. transfer account funds, by entering the appropriate value against the reserve adjustments line in each account. • this adjustment requires an equal and opposite entry against one or other department accounts in order for the adjustment to be validated, approved and therefore saved to the database. • these values are then uploaded into FIS as ZZ1 budget journal transactions at the end of each update process. • reserve adjustments can only be actioned for the CURRENT month. Future months are greyed out and values should not be entered against these cells. BOP In Year Adjustments Outside of the BOP Forecast process, interim transfers of funds/reserves can be actioned using the IN YEAR ADJUSTMENTS Template. Adjustments…. • are subject to the same approval process as during the BOP Update process • require approval by Faculty Offices • must comply with the source framework rules unless subject to an exception approval by Finance. • once approved, are uploaded to FIS overnight A5

32. UCL Finance Reporting Project Income Exceptions • Each account is assigned a source code which defines its source of income/funding, e.g. Source 9 Donations, • or, in certain cases, its activity type, e.g. Source P Primary Purpose Trading. • Each source code needs to be linked to a range of qualifying income analysis codes, with the exception of expenditure only sources, e.g. Sources 1, 2, 7, B, which need to be linked to expenditure analysis codes only. • All other sources should record income which accords with the source definition and the range of income analysis codes available for use with each source will be restricted on this basis. How the segments of the code framework link together….. BOP has used this mapping principle in the build of the templates: • qualifying income is recorded under its summary reporting category, e.g. Other Services Rendered. • non-qualifying income, recorded using an analysis code invalid for the source code, is shown as an Income Exception. • forecasts cannot be entered against these lines. What needs to be done to address this… • from August 2008, a set of FIS validation rules will be applied for the first time which will control the mapping of the income analysis coding to the source code structure • Finance are currently undertaking a cleansing exercise to address material cases of income exception in the source code structure and to action the necessary changes to the department framework in consultation with departments. • Departments will need to take the appropriate steps to ensure that future income is recorded in the appropriate account/source code combinations. A6

33. UCL Finance Reporting Project Inter-Departmental Recoveries and Charges Why are these transactions shown separately? The objective of these two separate lines is to capture internal trading activity in departments. Internal trading is defined as follows: • activity that involves one department charging another department for the use of its equipment, facilities, services • the supplying department recovers its costs • the customer department is charged a fair price for its usage Internal trading should be recorded using a specific range of analysis codes: • for every charge there needs to be an equal and opposite recovery transaction • the sum of all these transactions should always net to ZERO • The activity is effectively eliminated from the consolidated books of account. The issue of internal trading and how to account for this is still under discussion. It may be the case that this trading activity is not undertaken widely and is not material to any department, and therefore analysis of this activity should not be required within the workbook template. However, internal trading may impact at the departmental level in terms of the available funds to support its expenditure forecasts. No decisions have been made as to any changes to the existing range of internal trading analysis codes, 7**. One key issue requiring development is the elimination issue and how we can ensure that the forecast recovery in one department’s books is matched by the forecast charge in the trading partner department’s books. A7

34. UCL Finance Reporting Project Equipment over £25k Equipment over £25k is defined as follows: • a single invoice for one piece of equipment costing > £25k. • an invoice for several pieces of equipment each costing < £25k but with the total invoice value > £25k. A single invoice value > £25k may be split across several account codes. BOP allows you therefore to enter a value < £25k against this line. Why is this cost shown separately? • Equipment costing more than £25k is deemed to be capital equipment and an asset. • Equipment is capitalised at cost and recorded as a fixed asset on the balance sheet. • Equipment assets are depreciated over their expected useful life, usually 5 years for non-research equipment purchases and the term of the grant for research equipment When are we going to do this? • we will identify the capital equipment additions at each period end, and, • calculate the additions to fixed assets, the depreciation charge, and any release of deferred grants in respect of research-funded equipment, and reflect the changes in the I&E. How do we capture this information? • a new analysis code is to be created to capture actual equipment costs over £25k. • departments are requested to budget and forecast separately its equipment expenditure over £25k. A8

35. UCL Finance Reporting Project Contributions to Capital Projects Contributions to Capital Projects represent the following: • the internal contribution that departments have agreed to make towards the funding of capital developments, including building and refurbishment projects. • the charge for this contribution against existing department reserves Why is this charge shown separately? • we will identify the additions to fixed assets in respect of buildings and refurbishments at each period end, and, • calculate the depreciation charge, and reflect the changes in the I&E How do we capture this information? • a new analysis code is to be created to capture contributions to capital projects. • departments are requested to budget and forecast separately for capital contributions. A9

36. UCL Finance Reporting Project Inter-Department Transfers (IDTs) This form has two specific uses for departments. 1. It is used to correct the posting of ACTUAL transactions ONLY recorded in the CURRENT financial year. • Examples include: • correction to the analysis code of an actual income or expenditure transaction • correction to the account code of an actual income or expenditure transaction • corrections can be within department cost centres or between department cost centres. 2. It is also used to post internal trading transactions between departments. • the supplier department enters the credit transaction against its account code using 7** analysis. • the customer department receives the IDT and enters the debit transaction against its account code using the same 7** analysis. • the same 7** analysis code must be used for both the debit entry and the credit entry in order that the internal trading activity is “eliminated” on consolidation. Departments are reminded that IDTs are NOT to be used to transfer balances between accounts A10

37. UCL Finance Reporting Project Setting Up and Closing Accounts ALL department accounts must exist in FIS. • Departments will be expected to plan and manage effectively any changes required to their account code framework in order that related changes to their financial activities can be reflected as early as possible and as accurately as possible in the next BOP Forecast Update. • It is expected that departments will adopt the practice of requesting account code changes during the period PRIOR to the start of a BOP Forecast Update and only in very exceptional circumstances request new accounts AFTER the start of a BOP Update. BOP can only bring in accounts which already exist in FIS. Departments may request the set up and closure of accounts ONLY in FIS. This procedure currently requires departments to email new.fis.accounts@ucl.ac.uk with details of their new account(s), proposed account change(s) or closure of account(s). New FIS accounts during the Budget/Forecast update process Once workbooks are issued at the start of a BOP Budget/Forecast process, departments can bring into their workbooks new accounts that have been set up in FIS since the issuance of the workbooks by using the new account facility at the end of the entry template. An efficient account code creation and maintenance system is central to the delivery of these expectations with the consequent impact on BOP Budget/Forecast Updates. A11

38. UCL Finance Reporting Project New Account Code Creation and Maintenance Process A new procedure and system for account code creation and maintenance is under development. This system will be web-based and is being developed with the objective of simplifying the code change process and improving the speed with which changes can be generated, bringing the service standard for actioning the department requests down to between24 to 48 hours. Implementation of the new web-based system will take place at the earliest opportunity in the 2008-09 financial year. The system process for creating codes within FIS itself has been re-developed and this much improved process is now in place and is making a tangible impact upon service levels. Departments are advised to continue to request account code changes at the very earliest opportunity pending the launch of the new system. A12