Annual Budget Report Part I

2007-08 Annual Budget Report

Office of Business and Finance

Part 1A: Summary and Overview Spreadsheets

Current Balances, PBA Funding History, and Mandates and Service Improvements templates and data are provided as the first four tabs on the accompanying Excel workbook. Part 2 of this narrative section of the Annual Budget Report refers to the data provided in these spreadsheets.

Part 1B: Summary and Overview Narrative

Current Situation

Briefly describe your unit's mission, goals, and objectives, and progress toward achieving them. There should be a direct link between this section and your Performance Indicators.

The Office of Business and Finance performs two sets of core functions that are critical to the success of the Academic Plan. These are: 1) to provide a physical environment that is safe, clean, accessible and conducive to learning, and 2) to help generate and protect the financial resources necessary to support the Academic Plan. The specific elements of both of these goals are outlined below.

Physical Environment

The University’s physical environment is an over $4 billion asset that requires a significant investment of time, energy, staffing and technical skills, 24 hours a day, 365 days a year. Critical University functions such as teaching, research and public service are dependent on our ability to maintain, support and improve the physical environment.

Our goals in support of the physical environment are to:

Foster an environment that is safe and conducive to the educational mission of the University (Public Safety, Physical Facilities).

·  Maintain and preserve clean and usable facilities, grounds, utilities and campus infrastructure (Physical Facilities).

·  Provide space that meets programmatic needs in a timely and cost effective manner (Facilities Planning and Development, Physical Facilities).

·  Assure safe, reliable and cost effective access to the campus (Transportation and Parking, Physical Facilities, Public Safety).

Financial Resources

Every dime of the University’s $3.7 billion operating budget and its $2.0 billion endowment is touched in one way or another by the financial service units of Business and Finance. Although most of this revenue is generated by other parts of the University, the success of those units in meeting their academic goals is directly related to the success of various components of the Office of Business and Finance in assuring that these funds are tracked, distributed and expended appropriately and efficiently.

Our goals in support of the University’s financial activities are to:

·  Ensure that students receive timely and accurate fee statements, and that payments are processed in a timely and efficient manner (Treasurer).

·  Maximize returns on endowment and short-term investments at the appropriate level of risk (Treasurer).

·  Procure goods and services in a timely and cost effective manner (Business Operations, Controller).

·  Assure that financial records are accurate, timely and in compliance with University, state and federal requirements (Controller, Internal Audit, Resource Management Systems).

·  Provide cost effective specialized products and services (Business Operations).

·  Provide timely and accurate budget processes and financial data in support of University goals (Resource Planning, Resource Management Systems, Controller).

Challenges for the Upcoming Year

Describe the programmatic and fiscal challenges, issues, and special problems your unit will face during the upcoming year. Include any new services or activities your unit is required to implement, but for which funding has not been provided.

Our single biggest challenges for FY 2008 will be to find sufficient resources to address the growing problems regarding maintenance and renewal of our facilities, including infrastructure. Additional challenges include support of the Academic Pan (including enterprise-wide risk management), continuous improvement of processes and services, and promotion of a positive and diverse work environment.

This budget request includes four items to help address known maintenance and safety related needs. These items are:

·  $2 million in debt service to address aging infrastructure

·  An additional $.06 per square foot ($0.25 total) for the maintenance and renewal fund

·  $500,000 in continuing funds (Phase II of IV) for maintenance needs, including elevators

·  $250,000 in continuing funds for Phase II of III to improve fire safety

The other major expansion request is $361,000 to support the on-going operations of the eProcurement system including Travel. This new approach to procurement will serve multiple purposes, including cost savings to units through aggregated spending, improved internal controls and support of minority purchasing.

Innovations and Efficiencies

Describe innovative or alternative service delivery systems your unit has developed. Describe any initiatives for which you have collaborated with another support unit to increase efficiency and provide the best service. What plans are included in this budget report to improve or expand service delivery systems? Describe additional actions that will increase efficiency and reduce costs.

·  The Wire Transfer process has been transferred from the Treasurer’s Office to the Controller’s Office to provide recommended segregation of duties.

·  Greater efficiency and processing cost reductions should be realized from the implementation of direct deposits of employee reimbursements..

·  The doubling of the Surplus Department space and the new tracking system will improve the tracking of assets.

·  Business process changes associated with the implementation of the eProcurement initiative are expected to provide greater visibility into spending patterns, automatic requisition and PO generation, facilitate more timely order processing, and reduce costs.

·  An enhanced services model is being implemented in Stores and Receiving in support of the eProcurement roll-out. Departments will benefit from a single point of contact for all orders placed through the MarketPlace for problem resolution, order inquiry, delivery, and billing.

·  A new Procurement and Travel Card program has been implemented with strengthened policies and controls. The number of cards in circulation has been reduced from over 3,700 (at FY 2005 year-end) to less than 1,000, allowing the University to better manage associated risk and financial exposure.

·  Collaborative effort with the Office of the Controller on centralized asset tagging and tracking.

·  Successful completion of a multi-year prime contract for computer hardware.

·  Working with the Wexner Center to become an authorized reseller of Apple Computers.

·  Implementation of a shared Service Center for Student Affairs and Facility Operations and Development for reporting facility maintenance issues. New call center supports both areas and has a shared staff.

·  Standardization of policies and processes in Transportation and Parking as a result of the Strategic Parking Review is expected to better align rates and usage, reduce complexities and confusion, and help ensure safe, reliable and cost effective access to the campus

Reductions and Internal Reallocations

Describe any reductions or internal reallocations you have taken in the past year. How has this/have these affected your services? What has been your customer response?

·  $66,428 in cash to provide seed funding for IT category manager in Purchasing.

·  $87,075 in cash to provide seed funding for sustainability initiatives within Business Operations.

·  $14,400 annual rate in a shared investment with Student Affairs to fund a Graduate Associate position in Human Ecology in support of the supplier diversity initiative.

·  $22,000 cash from Receiving operational budget to fund development of a package tracking system (PTS) to support centralized receipt and tracking of assets and equipment.

·  Business Operations and Public Safety jointly invested, nearly $250,000 cash to fund the development and implementation of an automated timekeeping system. Over 5,000 staff hours have been invested to write requirements, complete system testing and training. This system interfaces with PeopleSoft, meets audit requirements and reduces duplication of efforts. Business Operations expects a reduction of 1.0 FTE when fully implemented. Other areas have expressed an interest in utilizing the same system.

·  $1.0 million cash reallocated to support implementation of eProcurement and the vendor MarketPlace.

·  Funding of $350,000 cash was reallocated to support implementation of a new space inventory system to support both daily operations and data analysis.

Business Process Changes

One of the principles set forth by the Support Units Committee is that “Support Units should adapt to altered conditions without transferring costs to academic units through price increases or by discontinuing or shifting services, whenever possible. Where price increases or service reductions are necessary, they should have prior approval through the budget process.” In the past year, major business process changes at OSU have included the entry of travel reimbursements and the direct deposit of employee payments. If your unit was involved in one of these or a process change of similar scope, please describe how your unit adhered to the above principle during implementation.

Business and Finance has been heavily involved in efforts to improve the University’s adherence to standard business practices as they relate to internal controls. To facilitate the transaction approval processes required of an effective internal control structure, Business and Finance has invested its internal resources in updating its transactional systems to allow for appropriate segregation of duties and transaction approval. Included in these changes are:

·  Travel – Upgrade of core Travel order and reimbursement system to replace antiquated paper-based processes. Along with the updated Travel policy, this new system provides departments increased flexibility and control over timing and approval of Travel-related expenses and assists in expediting travel reimbursements as well as providing mechanisms for satisfying internal control requirements with existing resources. Paper processes are replaced with electronic entry and approval and retention of documentation in the departments eliminates need for copying of receipts. When combined with direct deposit of reimbursements, the Travel System changes have allowed for faster turnaround of reimbursements with no additional staffing required.

·  On-line entry of employee reimbursements and other types of payments with records retained in the units has improved the turnaround on payments, reduced time spent of copying documentation and allowed for direct approval of payments, a requirement of effective internal control.

·  Direct deposit of employee reimbursement was accomplished through investment of internal resources with no additional work required of the departments.

·  Facility Operations in conjunction with Resource Management Systems is implementing a new space inventory system replacing the legacy databases. The space inventory systems supports the not only the University’s plant operation and maintenance expense calculations and budget distributions but also plays a critical role in the calculation of federal indirect cost rates for sponsored research.

·  The Office of the Treasurer is undergoing an operational review that focuses on strengthening the investment function and providing better alignment of all treasury related functions.

·  Facility Operations and Development has completed implementation of its new project management structure with the creation of the Project Design and Construction division. This restructuring represents a consolidation of all facility projects (construction, infrastructure and renovation) under one umbrella to improve the coordination across projects and provide more effective use of shared resources.
Part 2: Funding Report

Current Balances

Referring to Tab 1, Cash, of the accompanying Excel workbook, please provide an explanation of plans for cash balances equal to or greater than 20% of your unit’s PBA.

Overall cash balances within Business and Finance do not exceed 20% of PBA, however individual areas may have balances over 20%. In the upcoming year, available balances will be used to support investment in capital equipment, office renovation and automated systems to support process improvements. Planned projects include expansion of the automated timekeeping system, implementation of a project management system, updated to area web sites, development of expanded financial training programs, purchase of new police cruisers and delivery vehicles, renovations to Blankenship Hall to create and Emergency Management Center and redesigned space for the Office of the Controller.

Funding History

Referring to Tab 2, PBA, of the accompanying Excel workbook, what portion of the total change from FY2006 to FY2007 is due to the following:

Dollars / Percentage
New Mandates / $ 165,000 / .2%
Service Additions / $ 324,650 / .4%
Guidelines (inflation) / $ 1,678,060 / 2.3%
Miscellaneous Adjustments / -$1,412,189 / -1.4%
Total / $ 755,523 / 1.0%

3) Status Reports on FY 2006 and FY 2007 New Funding

For each item listed in the Summary of Funding Received in FY 2006 or 2007 (see Excel Workbook Tab 3, Mandates_Service Improvements), please complete the following.

Mandate Title (FY06):

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FOD – Steam Particulates (Final Phase) $90,000 Continuing

Explain how the funding was or is being used. Which customers benefit from the service, how do they benefit, and how does that support the academic plan? If available, provide any customer feedback regarding the service.

Funding was transferred to FOD Maintenance in fall of 2006 to initiate a steam trap maintenance program. In order to gauge the scope of work a contractor was hired to inspect all building steam traps on the Midwest campus. Based on those results we now intend to put in place a steam systems coordinator in maintenance to oversee contracted inspections and coordinate repairs with maintenance shops and FOD Utilities. That position is posted now with an estimated cost with benefits of $70,000. The balance of the funds will cover the cost of the contracted inspections.

Expected energy savings should substantially exceed the cost of this program, which will be closely coordinated with other work initiated by the Office of Energy and Sustainability Services within FOD Utilities.

List other offices on campus that provide similar or related services. How is your department collaborating with these offices to prevent duplication of effort?

No other offices provide similar or related services/activities.

Mandate Title (FY06):

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FOD - Title V Compliance $75,000 Continuing

Explain how the funding was or is being used. Which customers benefit from the service, how do they benefit, and how does that support the academic plan? If available, provide any customer feedback regarding the service.

The supplies and services portion of funding is being utilized for testing and lab fees. Emissions monitoring equipment for three of the four new boilers are fully certified with the Ohio EPA and certification of the fourth boiler is pending. In-house recruiting for an Electronic Technician was unsuccessful in identifying a qualified candidate and a recruiting firm was engaged in November 2006. One candidate has been identified.