Hyperion Financial Management (HFM) and Reporting Project August 19, 2014
Hyperion Financial Management (HFM) and Reporting Project
August 19, 2014
Agenda
Brief Overview of RCM
Hyperion Financial Management (HFM) Project goals
Projects Module
Review of Proposed New Chart of Accounts
Closing Comment/Next Steps Planning and Budgeting
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Responsibility Center Management • A budget model promoting financial responsibility at a
unit level
• Works most effectively in an environment of transparency and accountability
• RCM is a tool – academic leaders have responsibility for using the system to advance the missions of the University
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What Are The Benefits Of RCM?
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• Increases transparency of the budget process • Makes clearer the direct and indirect (university-wide and
campus) costs of operating the schools and the university as a whole
• Better aligns resources with the units that generate and control them
• Creates financial incentives for schools to increase revenues and reduce costs while supporting the university’s mission
• Encourages schools to develop multi-year budget plans • Provides academic leadership with better data and funds to
balance needs of units, set academic priorities and advance strategic initiatives
RCM is an academically focused, decentralized budget model that:
University-wide Support For Successful RCM
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• Academic leaders (President, Chancellors, and Deans) shape allocations to advance the overall strategic vision and to ensure the academic health and integrity of the whole
University-wide coordination and funding are needed to fulfill public missions of a university
How Does RCM Work?
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REVENUE • Tuition and Fees • F&A Return • Other Income
RESPONSIBILITY CENTERS • Schools • Research Centers • Auxiliaries
DIRECT & INDIRECT COSTS • Direct Expenses • University-wide Support Units • Campus/Division Support Units
Revenues are credited to the Responsibility Center
that generates them
Schools must then pay for their direct expenses as well as a share of the expenses to fund the
Support Units
Allocation of Costs University-wide Cost Pools
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General Administration
Academic and Student Support Libraries
Research Support Information Technology Facilities
Outputs from RCM
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The major output from RCM is data that can be used for many types of analysis
• Comparisons across units • Administrative cost and effectiveness
benchmarks • Space utilization
Time Frame
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DESIGN (FY13)
-Read available RCM literature and researched RCM models at other universities -Determined indirect cost pools and developed methodologies to allocate these costs to the revenue generating responsibility centers
PREPARATION (FY14)
-Advisory committees formed to discuss preliminary RCM budget model -Develop preliminary budget model -RCM budget model is continually refined and fine tuned based on committee feedback
TRAINING & TRIAL RUN (FY15)
-Training will be provided through information sessions, small focus groups, hands on computer labs, and documentation -A trial run of RCM will be implemented on paper and run parallel to AFB -Assumptions will be tested and “tweaks” made
FULL IMPLEMENTATION (FY16)
-RCM will be fully integrated into the general ledger
Hyperion Financial Management (HFM) Project Goals Standard reporting across the University System
• Consolidate external and management reports Feed data from Banner and RIAS (Oracle) into HFM to produce consolidated
enterprise-wide reports • Define a new consolidated chart of accounts (all segments & values)
Initially, to be used within HFM to consolidate Oracle and Banner financial results
In the future, to be used University-wide as part of the ERP implementation • Develop the crosswalk between the existing general ledgers and the
new COA • Align monthly financial closing processes
Reduce or eliminate the need for existing shadow systems
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Projects Module- Subledger Supporting the GL
• The plan is to implement Projects at the same time as the new GL.
• Project Examples: Capital projects, Grants, Gifts, Start-up projects or other projects Transactions for these examples are entered through the projects
module, using a project number that translates to the COA segment values.
• Projects contains information that is project-specific and that
is not contained in the GL COA.
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Account Code Combination
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Unit (RC) (3)
Location (3)
Org (4)
(Natural) Account
(5)
Fund Type (3)
Business Line (4)
Activity (4)
Future (5)
Project 123
Definition– Unit (Responsibility Centers) • Unit (Responsibility Center Groupings): School, Institution,
Center and/or Central Unit which is required to produce a balanced Balance Sheet.
• Establish this as the balancing segment.
Each transaction must balance; debits equal credits within the unit.
Would require due to/from relationships if data needs to be transacted between units, such as between SEBS and SAS. The system would generate the due to/ due from transactions
automatically.
Financial Statements: Profit/Loss and balanced Balance Sheet
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Definition – Location • Location: Identifies the area where the revenue and/or costs
were incurred including onsite, off-site, online and foreign locations.
Useful in identifying true costs for a responsibility center when
spread across multiple locations. Can be used for identifying clinic locations or specific locations
where work is being performed.
Financial Statements: Profit/Loss and partial Balance Sheet
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Definition - Organization • Organization (Department): A business area which owns
people and space. Values are not responsibility center/ unit specific. Reduce redundancy. Example: Dean’s Office. Provides the flexibility to see total cost for a single organization
across the university. Requires commonality including language (value description)
and purpose (use) for each value.
Financial Statements: Profit/Loss and partial Balance Sheet
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Definition – Fund Type • Fund Type: Identifies the funding source used to acquire
goods and services.
Unrestricted Restricted Endowment Plant Loan Auxiliary
Financial Statements: Profit/Loss and potentially a secondary balancing segment.
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Definition – (Natural)Account • (Natural)Account – Expenditure type that is the equivalent of
our current natural accounts (i.e. salaries, supplies, etc.) Review of existing values
Eliminate unnecessary values with no recent activity
Identify needed values that would enhance reporting.
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Definition – Business Line • Business Line: Required to be populated to identify the specific
line of business (or mission) being offered. The lower values are to be determined. Examples of high level values are: Instructional Research Healthcare Public Service Other
Financial Statements: Profit/Loss and partial Balance Sheet
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Definition – Activity • Activity: To identify total activity of high-level,
interdisciplinary and strategic initiatives that span across multiple responsibility centers/units.
Values will be determined by the President, Chancellors, and Deans.
Financial Statements: Profit/Loss and partial Balance Sheet
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Closing Comments – Next Steps
Relationship to RCM
Hyperion Planning/Budgeting Project
ERP Reimplementation Plans
Questions
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