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STRATEGIC DIRECTION STATEMENT

FINANCIAL MANAGEMENT AT UVa

 

OVERVIEW

As part of the Integrated Systems Procurement project, a Finance Task Force met from November 1997 through January 1998 to discuss future directions for financial processes and systems at the University of Virginia. The Task Force built upon the work of the Integrated Systems Task Force, various process simplification teams, and the University Issues Assessment report in order to develop this strategic direction statement. In addition, the Task Force will obtain input from a series of focus groups representing a cross-section of faculty and staff. The resulting beliefs and vision for the future outlined in this document are intended to help guide selection of a software vendor and implementation partner and to inform current and future process reengineering efforts.

 
The Task Force defined financial processes as having three major components:

The Task Force defined the scope of its discussions broadly to include financial processes as they are carried out in all business units of the University and for all types of funds (e.g., State, sponsored research, etc.). Recognizing the links to human resources, the Task Force met jointly with the Human Resources Task Force to discuss payroll-related processes.

 

TABLE OF CONTENTS

 

Each of the four sections of the Strategic Direction Statement answers a set of questions about the future:

 

 I. STRATEGIC CONTEXT

  • What is the strategic context for change?
  • What are the key trends and issues impacting the delivery of financial services and information in the future?
     

II. BELIEFS

  • What overarching beliefs does UVa have about how future financial processes and systems will support effective financial management?
     

III. PROCESS FEATURES AND EVENT VIGNETTES

  • The three components of the financial processes are:
    • A. Purchasing, Receiving and Paying for Goods and Services
    • B. Paying Faculty, Staff and Students
    • C. Financial Infrastructure
  • What are the key design characteristics of the processes and systems that will enable the delivery of service and information in the future?
  • Based on the beliefs and process and system design characteristics, how will specific activities occur in the future?

 

 I. STRATEGIC CONTEXT

What is the strategic context for change? What are the key trends and issues impacting the delivery of financial services and information in the future?

The University seeks to maintain its position as one of the country’s leading public universities and its ability to attract and retain top quality faculty, staff and students. The quality of administrative services must support this goal. Specifically, we believe that financial processes and systems must change to respond to increasing stakeholder demands, the realities of decentralization, innovations in the external environment, and competition for faculty, staff and students.

Today's faculty, staff and students are more technically sophisticated and have increased service expectations. They require easy access to on-demand information, services and support, as they are accustomed to receiving in other aspects of their lives. Our stakeholders derive great benefits from simpler processes. As a result, the University has embraced the Process Simplification effort, which should continue to be supported and enhanced.

The University of Virginia has evolved over time into a highly decentralized operating environment. Academic departments and other business units continue to demand greater decentralization of responsibility and accountability. Growth in the volume and complexity of business transacted by the University, whether measured by dollars or numbers of transactions, further contributes to the need to support and enhance decentralized financial management. At the same time, there is an opportunity for greater commonality across similar business units and a need to share information and financial practices across academic units engaged in interdisciplinary activities.

Finally, the University must be prepared to adapt to and leverage changes in the external business environment. For example, electronic commerce holds the promise to change dramatically the way goods and services are purchased and paid for, sponsored programs are administered, and banking relationships are managed. Also, the University's relationship with the State continues to change. The University should prepare for and encourage the State's gradual move to allow more autonomy by demonstrating that the University is strengthening financial management through improved automated controls and post-audits and higher quality management information for compliance purposes.

UVa must consider all of the above drivers as decisions are made about how to change financial systems and processes.

 

II. BELIEFS

What overarching beliefs does UVa have about how future financial processes and systems will support effective financial management?

We hold the following beliefs about how financial processes and systems should function in the future:

 General
  • The system should be easy to use and change.
  • Geography should not be a limiting factor for services provided to remote locations.

Data Capture and Storage

  • Data should be created once, at the source. That is, data entry should be distributed rather than centralized. The data should carry a unique user-id.
  • There should be a defined need for the creation, storage and distribution of all data.
  • Those who create data have the right to get it back in a user friendly and useable format that enhances the end users' ability to effectively manage their operations.
  • Data should be stored electronically, in an open database architecture that facilitates the exchange of data with external organizations. i.e. .foundations, auxiliaries, etc.
  • Data should remain accurate and secure.
  • Data updates should be immediately available to all system users.
  • The use of shadow systems (i.e., redundant data and data entry) should be minimized.
  • Supplemental systems that meet users’ unique data needs should be enabled. These systems should be shared and supported among departments/functions.
  • There should be one data steward responsible for each data element. Data stewards, in conjunction with the end users, should be much more involved in defining data elements and resolving different priorities and data definitions.
  • Data should be edited on-line for completeness and accuracy as the transactions are initiated.
  • All data should be accessible to all authorized users.

  Workflow

  • Users should be able to track status of all transactions on-line.
  • The system should be able to generate to-do lists.
  • We should create the opportunity for streamlined oversight with flexible models and routing, in order to accommodate local business cultures. In all cases, departmental approval policies and procedures will be accommodated.
  • We should move to real time and/or post transaction audits.

  Business Rules

  • True accountability and responsibility should be delegated to the lowest level that is appropriate for the situation.
  • Multiple but compatible financial management models (e.g., cost centers vs. profit centers) need to be maintained within the University.
  • The University should encourage and take advantage of the State's gradual move to allow more autonomy, which will most likely come in small steps rather than big leaps.

 Oversight, Training and Support

  • The system software / hardware, both central and departmental, needs to remain current.
  • Technical support should be readily accessible.
  • A forum in which to propose, negotiate, approve and implement change is necessary.
  • The training program should be robust and accessible via multiple channels: on-line, traditional and specialist type training.
  • We should spend less $$ on checking and quality assurance activities and more on training and coaching activities.

III. PROCESS FEATURES AND EVENT VIGNETTES

 A. Purchasing, Receiving and Paying for Goods and Services
In the future, the procurement process and system will provide a user friendly shopping and ordering process that enables any end user to make an intelligent buying decision and record necessary information accurately in the system. The Central Office, however that is defined, will provide more consultative services, develop better information and tools, and support a variety of methods for acquisition and payment. Purchasing, receiving and payment processes will leverage available technology and advances in electronic commerce.

 

1) Process and System Characteristics

What are the key design characteristics of the processes and systems that will enable the delivery of service and information in the future? 

Shopping

End users will have easy access to on-line shopping in a real-time environment. Helpful navigation tools and easy to use screens will facilitate shopping. Features available to end users on-line will include:

  • Electronic catalogs
  • Information on merchandise, including current prices, enhanced product descriptions, lead times for ordering, availability and delivery options. Information on surplus property will also be included.
  • Information on approved items, including basic and deluxe models
  • Capability to select own items and receive quotes
  • "Smart" questions (ticklers) generated by the system for certain products

UVa will promote individual shopping and will preserve end user flexibility to select a vendor. The end user will have the option to seek advice from the Central Office. Services provided by the Central Office will include:

  • Advice and professional consultation
  • Vendor information and analysis
  • Pre-shopping and negotiation of contracts
  • Identification of preferred vendors based on cost, service and quality
  • Information to support local vendors
  • Identification and tracking of minority vendors
  • Testing and rating of products
  • In conjunction with vendors, maintenance of the shopping area of the system (i.e., up-to-date, on-line catalogs) 

Acquisition

End users will have the ability to acquire goods and services through a variety of methods, including telephone, in person, procurement card (possibly a UVa card) and EDI. The Central Office will support innovations that leverage trends in the banking industry, such as debit cards. While the system and process will enable electronic purchases from remote vendors, the ability to buy from "across the street" will be maintained.

Selection of an item during the shopping phase will initiate the order process. Features of the ordering process will include:

  • Assistance with object code selection by providing "English" descriptions for the various codes
  • System warnings for errors such as incorrect account number or object code
  • Ability to route order to appropriate person for authorization, where necessary
  • Ability for departments to check budgets and encumber purchases as an option, not a requirement
  • Ability to distribute costs to correct accounts (i.e., for procurement card transactions) at point of purchase
  • Availability of status of order and information on when order is complete
  •  The Central Office will continue to provide formal bidding and RFP services. 

Delivery and Payment

For standard items, delivery will be made to a default address. For unique delivery needs, vendors will follow delivery routing preferences specified by the end user.

UVa will continue to support payment of invoices below a certain dollar threshold by negative confirmation. Above a certain dollar threshold, positive confirmation will be required. In either case, end users will be provided with easy access to electronic invoice information. Also, end users will have the ability to record partial shipments.

The University will leverage advances in technology and electronic commerce to facilitate timely and easy payment. Specific features will include:

  • Automated receiving process that transfers appropriate data to Accounts Payable and, if applicable, to Fixed Assets
  • Ability to scan or image paper documents for payment purposes and departmental access
  • Electronic mechanism to distribute procurement card charges to proper account before posting to the general ledger
  • Electronic invoices from vendors, where possible
  • Centralized payment process
  • Payments would be made via electronic data interchange (EDI) and electronic funds transfer (EFT) wherever possible.
  • Ability to support demand payments, such as travel and expense reimbursements, honorarium payments and other payments to individuals or companies where there is neither a purchase order nor invoice

 Inventory Management

The Inventory Management system should be comprehensive enough to be used by all interested parties. It should have the ability to:

  • Maintain an on-line catalogue of items available in inventory
  • Allow for real-time updates to inventory
  • Establish economic order quantities and provide for automatic reordering.  Generate appropriate management reports as tools for monitoring.
  • Support central stores, as well as assist other individual departments which maintain inventories
  • Use bar codes for the receipt and tracking of inventory
  • Scan documents, such as shipping tickets, into the system
  • Allow for electronic requisitions, pick lists, and transfer of funds from other University departments.
  • Expedite open orders by generating an open order report
  •  Track performance through reports, such as sales by department, customer and product; inventory turns;  vendor performance, etc.
  • Allow the end user to easily customize and generate their own reports.

 Fixed Assets

The purchasing system should include a central fixed asset system that is available on-line to departments and other interested parties. The system should provide for real-time updates and have the ability to:

  • Capture necessary data (i.e., serial number, location, etc.) at the point of receipt
  • Support bar-coding of equipment to facilitate physical inventories
  • Allow all departments/business units to view their fixed assets inventory and to sort and prepare reports
  • Allow owners to record movement and retirement of equipment in the system
  • Allow real-time updates to a central surplus inventory system and an ability for University departments to view current surplus property inventory
  • Make changes easily (i.e., different location or faculty member using)
  • Allow person maintaining to track supplemental information for their purposes
  • Monitor depreciation expenses

 

  2) Event Vignettes
Based on the beliefs and process and system design characteristics, how will specific activities occur in the future?
Shopping for and Ordering Equipment

Sally Smith, an assistant professor in the Biology Department, wants to buy a new type of microscope for her lab. She locates the on-line storefront and begins her shopping. Sally finds that she has access to several on-line catalogs from leading scientific equipment vendors. By entering her specifications, she is able to quickly identify several models that would meet her needs. She clicks on each in turn and is advised of availability, price and delivery options. Sally notes that UVa has designated one vendor as a preferred vendor, and that vendor's product has a more detailed description and a rating based on comments from other UVa stakeholders. However, that microscope does not meet her needs as well as one provided by another vendor, and she decides to select the other vendor's model.

Sally clicks on her selection and completes a purchase requisition, which includes information for the vendor (quantity, default delivery address, procurement card information) and information for the UVa accounting system. She quickly scans a list of suggested object codes and selects the appropriate one based on the easy to understand definition provided. When she enters the account code for her research project, the system posts a reminder to check that she has equipment budget remaining. When Sally has completed the order, it is submitted directly to the vendor. A few weeks later, the microscope is delivered to her lab.

Approving Payments

Bob Brown, a fiscal administrator in Facilities Management, manages the purchasing and accounts payable for the department. As he turns on his computer to begin his daily payment review process, he thinks back to the days when he and several assistants had to sift through a large volume of paper invoices and record them in a shadow system in order to monitor the budget. Today the task is much simpler, and the department has reallocated his assistants’ time to other activities. He sees in his e-mail that he has a number of invoices that have come in. Bob scans the list of smaller ones, and seeing that they are all fine, does nothing and knows that they will all be paid. There is one large invoice that he must approve, and since he has a question about it, he accesses the invoice and purchase order detail on the system. Once he has cleared up his question, he approves the invoice for payment.

Allocating Procurement Card Charges

Alex Acura, a lab technician in Chemical Engineering, has been given security access to the procurement card account code allocation system. His PI assigned him the responsibility to check every day for new charges. Today, he remembers that he needs to change the account code for a charge from the default code, the PI’s primary research grant, to the general departmental account. He accesses the system, sees the charge and makes the change. Several other charges have appeared has well. Once he has given his electronic approval, the charges and associated account codes are routed to accounting for automatic posting to the general ledger. Alex knows that the PI will be pleased that his grant financial report is up to date and accurate and that a time consuming cost transfer will not be required to make a correction after the fact.

 B. Paying Faculty. Staff and Students

The payroll process, which includes time and leave reporting, effort reporting and tracking personnel actions, will be streamlined by empowering employees to maintain their own personal data and providing supervisors and managers with tools to oversee the process. At the same time, the process will continue to allow for flexibility.

 1. Process & System Design Characteristics

 What are the key design characteristics of the processes and systems that will enable the delivery of service and information in the future?

 New Employee Activation

  • New hires will receive better information and tools to allow them to provide, verify and update much of their own information. The process will be consistent for all new hires regardless of type (faculty, classified, student). Features include:
  • To the extent possible, process will be fed by information collected in the HR system during the hiring process.
  • New hire will receive information packet to review, prior to start date. Packet will include instructions on "what to bring" to orientation.
  • New hires will verify and update information electronically. A by-pass option (i.e., paper forms, IVR) for those without electronic access should be provided.
  • New hires will be provided with job specific forms and information.
  • Benefits selection information will be received from new hire. [see HR Strategic Direction Statement for further discussion of benefits.]
  •  The hiring official will have information available to ensure all parts of the process are completed. The system should:

    • Provide access to the hiring official to review and complete data (e.g., assign fund code)
    • Generate exception reports for required data elements (i.e., I-9) that are not provided by the new hire for review by the new hire and hiring official
    • Initiate payment when all major compliance information is provided; minor compliance data that is missing will not result in a stop pay.
    • Maintenance of Employee Data
    • In the future, UVa will expect its employees to maintain aspects of their personal data. This will require establishing clear responsibilities between the employee and employer. The process and system should provide:
    • Ability for employee to review and make appropriate changes (i.e., address, name) to their own information at any time
    • "What if" modeling capabilities to employee (i.e., impact on their benefits if they were to take a leave of absence)
    • Ability to execute the "what if" if further review is not required
    • Confirmation reporting of changes
    • Prompts to identify deadlines and changes (i.e., when X changes, Y must change)
    • Ability to convert FTE to $ or vice versa, to provide reports that make sense to officials
    • Ability to create/edit retroactive changes and future dated transactions

Extra steps and unnecessary approvals will be eliminated. Instead, supervisors will receive reports when changes occur. Changes in certain data fields will trigger follow-up review and/or actions (i.e., a change in Federal tax status might require a hard copy form be sent to the IRS.)

Finally, the process should allow different business rules (i.e., approval routes driven by attributes or $ thresholds) for different schools. If it is not cost-effective to embed these rules in the system, they should be carried out manually through enhanced employee training.

Time and Leave Reporting

It is important to capture time and leave information in order to pay wage employees, assess and accrue benefits, and track for compliance and certification. The time and leave reporting process and system need to be flexible and timely. The employee will be held responsible for both time and leave reporting. Other characteristics include:

  • Ability to enter time and leave electronically, anywhere and at any time. Provide other options for those employees without electronic access.
  • Ability to issue paychecks from both actual time entered and from a pre-loaded payment schedule (salaries)
  • Allowance for input from multiple time-capturing systems
  •  Reporting and verification of hours prior to generation of paycheck to reduce errors
  • As appropriate, employee honor system for reporting exceptions (i.e., all time off)
  • Ability to handle multiple methods of annual leave based on employment classification or length of service
  • Transition to a more standardized leave system for all employees
  • Adequate feedback and reports provided to supervisors and management

Generation of Paycheck

Paychecks will be based on more up to date information. The volume of rework and special checks will be reduce by allowing staff to:

  • Process online corrections
  • Enter corrections up until the day before the checks are cut
     

UVa will continue the move towards direct deposit while maintaining flexibility in the frequency, method and type of payments. As such, the process and system should:

 

  •  Process both direct deposits and hard copy paychecks
  • Allow for deposit of funds into multiple accounts
  • Provide for different pay schedules (i.e., bi-weekly, monthly)
  • Allow for changes in the banking industry
  • Stipend payments would flow through the same system and process as salaries and wages.  However, the current practice of separate distribution, by direct deposit or physical check, would be maintained.

Compliance, Tax and Effort Reporting

All types of reporting and compliance will be facilitated through processes and systems that:

  • Allow for electronic reporting
  • Provide ability to see all monies received by an employee from any source within the University (i.e., stipends, Financial Aid, payroll)
  • Facilitate effort reporting, in whatever form it takes in the future (for example, provide link to OSP System to avoid redundant data entry and to report contributed time)
  • Identify payments made to non-resident aliens for tax compliance purposes (including links to relevant data maintained by the International Studies Office)
  • Include tickler reminders to avoid non-compliance (visas, appointment renewals, I-9’s, etc.)
  • Create an interface between payroll and International Studies

 

2. Event Vignettes
Based on the beliefs and process and system design characteristics, how will specific activities occur in the future? 

Employee Activation

Beatrice Adams, a Business Administrator in the Darden School, has hired a new staff employee, Stan Mender. Final approval has occurred, and the system automatically changes Stan's applicant status to employee. This transfers all of his applicant data to the payroll database.

The system automatically assigns Stan a personal identification number (PIN) number that he will use to access the system. Stan accesses the system to review and verify the personal data he provided on his application, including his address. In addition, he provides information for his W-4 and bank direct deposit authorization. Stan is prompted to access another screen to schedule his orientation session. He is then provided with a list of documents, including proof of his citizenship, to bring to orientation. Later that week, Beatrice access the system, sees that Stan has completed his information, and assigns a fund code.

Maintenance of Employee Data

Gloria Power, a counselor in the Student Affairs office, is an alumna of UVa and enjoys keeping up with her classmates through the alumni magazine. She has just relocated to Charlottesville to take a position at the University and is worried about not receiving her mail now that her address is out of date in the system. She is excited to learn from her supervisor that UVa trusts employees to update their own personal information, without completing a personnel action form as she had to at her prior institution. She learns that approvalthat approval routings for certain types of actions still will still occur, and her supervisor suggests that they sit down later and discuss the rules in the Student Affairs office.

 
Gloria accesses the system and updates her address on her personal information screen. She later receives an e-mail confirmation of the address change. A few weeks later, she receives the alumni magazine at her new address, and notes happily that updating her address in the alumni database did not require another call.
 
Time and Leave Reporting

As a business administrator in the Department of Internal Medicine, Frank Faster is very happy that he is automatically paid based on a 40 hour week unless he accesses the system to report an exception. Frank took a personal day last week and needs to report it. He thinks back to the old days when there were over thirty categories to code leave; today there are only seven leave categories. Moreover, the dreaded "Bubble Sheets" have been replaced with an easy to access and use on-line system. Frank quickly accesses his personal leave information and records the personal day.

On a weekly basis, Frank conducts a quick post-audit of several other classified staff employees. He accesses the system and sees that one of the secretaries properly coded and reported the sick day she took last week. He then prints a report showing available balances for sick, vacation, personal and approved FMLA days for all of the staff in the department. Periodically, he forwards his Chair a summary e-mail report for information purposes.

Generation of Paycheck

On payday, Sheila Ispley, an administrator in the Nursing School, receives an electronic payroll earnings statement via e-mail. Seeing that her paycheck has been directly deposited to her bank account, she accesses her on-line checking account and transfers her rent payment to her apartment management company. All of the employees in her department use direct deposit, even graduate students receiving stipends. She no longer needs to take the time to distribute paychecks and earning statements to all of her employees as she did in the mid 90’s.

 

C.  Financial Infrastructure

The University of Virginia must have high quality budgeting, general accounting, financial reporting and investment and cash management processes and systems in place in order to support efficient and effective management of all types of funds (i.e., State, local, sponsored research, discretionary) and budgets (i.e., revenue, expense, capital). 

1. Process & System Design Characteristics

What are the key design characteristics of the processes and systems that will enable the delivery of service and information in the future?

  a. Budgeting

A large number of stakeholders are involved at various levels in the budgeting process. Thus, the budget process must have flexibility in the span of authority allowed to create, review and monitor budgets. Also, all of these stakeholders should be provided with tools and information to perform their respective functions in the budgeting process. Stakeholders include:
  • Fiscal Technician/Clerk
  • Fiscal Administrator
  • Department/Division Manager
  • Principal Investigator / Research Administrator
  • General Accounting
  • Major Business Unit (MBU) - (i.e., School, auxiliary, etc.)
  • Vice President / Provost
  • Budget Office
  • Board of Visitors/Cabinet 
     

Preparation and Submission

Budgets need to be created at different levels, and individual budgets need to be aggregated at different levels (i.e., roll up data to see a bigger picture). Regardless of which stakeholder prepares the initial budget, they should have the ability to:

  • Use smart templates as an aid in creating the budget; for example, automatically calculate indirect costs and fringe benefits
  • Provide for the tracking and reporting of budget and actual expenditures on an aggregate basis
  • Create budget models and what-if scenarios
  • Budget by person, unit, project, as applicable
  • Budget down to different levels of detail
  • Maintain different fiscal year budgets concurrently and process transactions against either
  • Monitor sources and uses of dollars

In addition, the budget process/system needs to accommodate various budget cycles and shared budgets across different MBU’s.

Review and Approval

The budget review process needs to be flexible in order to allow varying review and approval paths by MBU, type of budget and budget attributes. Depending on how many of the business rules are built into the system, training will be required to handle the flexibility in policies. The status of the budget review should be tracked.

Those reviewing the budget should have the ability to:

  • Review on-line, whether reviewer is internal or external to institution
  • Review and approve budget at different levels of detail or in aggregate
  • Easily identify deviations to non-standard budgeting or violations of business rules

Implementation

Budget activation should require a minimal amount of intervention, assuming all appropriate reviews and approvals have occurred. Features include the ability to:

  • Activate new budget while current budget is active
  • Activate new budget at whatever level of detail the department creates it
  • Activate budget based on user selected attributes, i.e., event driven
  • Automatically feed budget data to other systems, such as Payroll and the General Ledger
     

Amendments

As in the current process, stakeholders should have the ability to amend budgets for accounts within their purview in whatever way is necessary, so long as the overall budget is not impacted. This will include the ability to:

  • Enter amendment information on-line for your business unit's accounts
  • Process temporary and permanent amendments
  • Process amendments that impact different fiscal years (i.e., future dated budgets)
  • Access detail to assist business units in generating custom reports for monitoring

Budget amendments will continue to require approvals as determined by the major business unit. In certain circumstances, amendments will be automatically generated based on expenditures (budget bump).

 

b. General Accounting and Financial Reporting

      General Ledger/Account Management

While some requirements are State imposed and unlikely to change, the Chart of Accounts should be simplified as much as possible during implementation. Moreover, the complexity of the system and Chart of Accounts should be hidden from end users.

Account creation and close out for all types of accounts (including research) should occur quickly and easily. For example, account creation and close out for certain accounts should be automated at the department level. Also, end users should have the ability to freeze an account selectively at the object code level (i.e., freeze to everything except salaries).

The Chart of Accounts design and system should support the ability to assign unique user specified attributes to account codes in order to support departmental accounting in addition to central accounting. Features should include ability to:

  • Assign attributes to individual transactions within the account
  • Allow user changes to attributes as needed
  • Report on attributes within and across accounts

For certain attributes (i.e., employees), attribute codes should be consistent across MBU’s.

Indirect cost allocations should occur real-time. Also, the system should allow for flexible distribution of overhead costs by account.
 

Reporting

End users will have the ability to create and view reports on-line, rather than receiving centrally generated paper reports. As such, departments will require training and assistance in developing customized reports. Reporting capabilities will be flexible and will support:

  • Potential to create standard (canned) and customized reports
  • Ability to determine reporting requirements based on ledger type to meet end user needs
  • Summary of information on cash and expenditure detail in a single report
  • Monthly cash flow statement, including encumbrances for any account, regardless of underlying accounting structure ("bank statement" type report)
  • Ability to account for and report on, in an individual investment basis,  the status of all endowed and invested funds
  • Comprehensive enterprise report by Major Business Unit, school, division, department, etc. regardless of account types

Also, tools to facilitate account monitoring will be available. For example, monthly reports will show budget to actual information. For grants, the system will flag accounts with special circumstances (e.g., grants with fiscal year carry-over limitations) for review.
 

Account Reconciliation

The integrated system would allow for the automated reconciliation of accounts. Therefore, the need for staff to perform the manual reconciliation tasks would decline.  This would allow for more time to focus on financial analysis, forecasting and problem resolution.
 

Fiscal Year End Close Out

To support year end activities, the system should:

  • Handle encumbrances and carry-overs
  • Provide for a 13th month to handle reporting requirements

 

 c. Treasury and Cash Management
Cash Management

The system should have the capability to support both daily tracking of cash and forecasting and trend analysis. Daily on-line, real time transaction and tracking capabilities should include the ability to:

  • Automatically generate a cash transaction based on defined attributes
  • Monitor incoming and outgoing cash and wire the daily surplus to investments
  • Aggregate quickly the previous day's activity for cash management reporting and investment accounting to assist in meeting the 24 hour rule (excess State monies collected by UVa must be wired to the State within 24 hours)
  • Identify and manage on-hand cash balances, by department
  • Provide an on-line, real-time summary of relevant cash transactions
  • Improve the daily reconciliation process with the Medical Center

Forecasting and trend analysis capabilities should include the ability to:

  • Track history of in/out flows annually to identify trends and historical patterns and support forecasting
  • Forecast income (interest income and annual balance)
  • View trends and forecasts in graphic form
  • Blend budget accounting into the cash forecasting process
  • Aggregate main sources of revenue and expense to allow for "what if" forecasting

 Cash Receipts and Deposits

The system needs to be flexible and must support easy and accurate processing of cash receipts. The system should allow for on-line real-time recording of deposits in the general ledger. In addition, it should support the ability to:

  • Provide an easier method for depositing and recording cash
  • Receive payments via the Web
  • Maintain the system of distributed processing (NDC), which allows departments to deposit to any bank
  • Maintain collection of revenue on a departmental basis
  • Maintain automatic distribution of student payments (i.e., apply to the correct departments, in the right sequence and to the individual line item)
  • Obtain better information on Federal drawdowns, both from the Bursar's office and OSP
  • Obtain supporting documentation for payments (EDI and checks)
  • Maintain the ability to place a check into suspense until the source of payment is determined
  • Improve the gift receipt processing so that money is moved into the endowment fund as soon as possible; also, establish a tickler file to ensure gift funds are processed eventually 

Banking Relations

The system should facilitate banking relations. For example, the system should have the ability to:

  • Handle multiple banks and accounts
  • Support reconciliation with the bank(s)
  • Take advantage of technological advances in banking
     

State Relations

The system should have the capability to:

  • Calculate what is owed/due between the State and the University and initiate an electronic funds transfer (EFT)
  • Map to the State's accounting system (CARS)
  • Separate State and local funds
     

d.  Accounts Receivable

The system should provide for a Billing and Accounts Receivable system that is available to all business units and is flexible to handle all charges levied, both internally and externally.

 

2) Event Vignettes
Based on the beliefs and process and system design characteristics, how will specific activities occur in the future?
 

Preparation of Grant Proposal and Budget

Monty Stream, a professor in the Department of Microbiology, has decided to submit an application to the NIH for grant funding and has been working on the technical proposal. A few weeks before the proposal is due, he sits down with the Department's Fiscal Administrator, who has recently participated in UVa’s new research administration training course, to work out the details of the budget. Monty asks to see what the administrator has learned. Together, they access a NIH budget template on the system and begin to enter the budget specs that Monty has developed on a legal pad. Monty is pleased to see that the budget automatically verifies faculty salaries with the payroll system, calculates fringe benefits and assumes a standard indirect cost rate. They are able to perform what-if analyses around the proposed mix of faculty and graduate student time on the project. Once the budget is finalized, it is routed on-line with the rest of the proposal for approval and submitted to the NIH using their electronic research administration protocol.

Later that year, Professor Stream learns that he has received the award with the requested budget. Immediately after receiving the electronic award notice from the NIH, the proposal budget is electronically uploaded by research accounting to the accounting system, and Monty and the administrator receive an e-mail notifying them of the account number and the process and policies for on-line budget modifications. They are pleased to see that the process has occurred quickly and seamlessly and breathe a sigh of relief that they can spend from the project account immediately.

Conducting Historical Cost Analysis

Caroline Waring, an administrator in the Bursar's Office, needs to research historical postage costs as her manager believes that these costs have been causing overruns in the department budget. She accesses the data warehouse and selects a standard query form.  Caroline keys in the three department account numbers, the postage object code and the vendor ID for their bulk mailing vendor and requests information on budget and actual expenditures for the last four years.  She downloads the data into a spreadsheet, which is automatically formatted, and produces a graph with the information to give to her manager.  As she hands the report to her manager, Caroline comments, "Your hunch was right. Postage costs have gone up considerably in the last four years and we have not adjusted out budget accordingly.  We need to investigate cost savings measures."
 

Monitoring Departmental Financial Activity

Todd Carter, an administrator in the History Department, has responsibility for monitoring his department's financial performance and providing summary reports for the Chair.  Working from some standard system templates provided for all departments, he has established a set of customized reports, which he has access to on demand.  With the push of a button, he can request that all of the reports be run, or he can request a specific report.  As new needs arise, he revises or adds an additional report to his menu.

Today, Todd views a summary report showing revenues, expenditures, encumbrances and cash and budget balances for all departmental accounts, regardless of funding source.

Next, Todd selects a report that provides a view by faculty member to see what total year-to-date OTPS expenditures are for each faculty member. The report shows total activity by faculty member by expenditure type across all accounts, an analysis that is made possible by the assignment of an attribute identifier to each faculty member. Finally, Todd requests detail for a few accounts that he has been monitoring more closely to check what expenditures have occurred. Seeing that one account is nearing a budget deficit, he freezes the account to all charges but personnel. Satisfied that the accounts are in order, he generates a custom report that presents departmental financial information in the format most useful to the Chair and e-mails the report to the Chair.

 
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Updated January 12, 1999