Getting the Most out of Budget System

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1 Sunday MAY 21, :30-2:20PM Getting the Most out of Budget System MODERATOR/ SPEAKER SPEAKERS Rana D. Lacer CFO, Las Vegas Convention and Visitors Authority Charles Collins Budgeting Practice Director, LSI Consulting Larry Stone Assessor, Santa Clara County #GFOA2017

2 Getting the Most out of Your Budget System Charles Collins, Director Budgeting System Practice LSI Consulting

3 Essential functions of a budgeting system 1. General Functions A. Leverage data from across business units (e.g. Accounting, HR, Procurement, etc.) 1. Configure automatic/on demand data extracts (master and transaction data) B. Supply adopted budget to the accounting system C. Web and spreadsheet user experience D. Configurable budget forms E. Audit trail of entries (date, time, user and change in amounts) F. Configurable workflow (organizational, desktop and form specific) G. Attachment of supplemental files H. Configurable access controls (role-based on form types and data)

4 Essential functions of a budgeting system 2. Personnel Costs A. Project Salaries and Benefits for Existing Positions 1. Recent Payrolls or HR Data Extracted from HR System (Pay Scale, Benefits, Jobs, Positions and Emp) 2. Scenario Development Previously Approved Salary Escalators Known Changes to Costs by Benefit Plan Calculation of What If Options for Potential Changes to Salaries and/or Benefit Plans B. Project Salaries and Benefits for New Position Requests 1. Should use the same underlying payroll or HR Data 2. Should support selection of new positions as part of a Decision Package

5 Essential functions of a 3. Internal service budgeting budgeting system Base internal service budget Changes in demanded entered Allocation to spread costs Allocation costs locked Central budget review

Below the GL-level with escalators B. Operating supplies 2.

6 Essential functions of a budgeting system 4. Operating budgets Non-personnel A. Contracts 1. Below the GL-level with escalators B. Operating supplies 2. Calculation based on prior year actuals C. Conferences, training & travel 3. Below the GL-level Zero-based D. Capital outlay (Equipment) 4. Zero-based

7 Essential functions of a budgeting system 5. Capital improvement planning A. Previously approved projects - Existing project form 1. Tab for CIP planning - columns for total project estimate, projectinception-to-date, end of the prior year remaining balance, current year budget, budget year estimate, multi-year estimates 2. Project information 3. Cash flow / spending plan 4. Operating costs associated with the capital facility B. New Projects - Capital decision package form 1. Tab for CIP planning Total project estimate, budget year estimate, multi-year estimates 2. Tabs for project information, cash flow and operating costs

8 Essential functions of a budgeting system 6. Grant planning A. Continuing grants form A. Similar to capital budgeting form B. Use existing grant codes B. New grants form A. Decision package form B. Use Prospective code for the grant number C. Select and calculate new grant-funded positions

9 Essential functions of a budgeting system 7. Decision support A. Decision factors 1. Multiple criteria B. Ranking 1. By individual criterion and summary C. Apply as needed 1. Operating decision packages 2. New capital projects 3. New grants

Excel-based analytical reporting 2. Web-based canned formats 3. Publication-ready tools C.

10 Essential functions of a budgeting system 8. Reporting & analytics A. Real-time: Values entered in the budget system appear in reports B. Range of reporting options 1. Excel-based analytical reporting 2. Web-based canned formats 3. Publication-ready tools C. Reporting provides a range of visualizations 1. Traditional graphs = Pie, donut, vertical/horizontal bar, line 2. Non-traditional graphic options = PictoGraphs

Advanced features 9. Long-range forecasting A. Multi-Yyear time horizon B. Personnel cost forecasting 1. Use the same system features with a longer time horizon C. Forecast using economic factors 1.

11 Advanced features 9. Long-range forecasting A. Multi-Yyear time horizon B. Personnel cost forecasting 1. Use the same system features with a longer time horizon C. Forecast using economic factors 1. Maintain by cost element (Character of expenditure or GL account) 2. Each year in the horizon D. Apply projected operating costs associated with capital projects E. Supplemental manual entry for periodic costs 1. Example: Election costs

Advanced features 10.System supports introduction of data from external sources A. Examples: Service database, performance data, community condition data B. Flexibility of database technology 1.

12 Advanced features 10.System supports introduction of data from external sources A. Examples: Service database, performance data, community condition data B. Flexibility of database technology 1. To easily add fields, tables, cubes 2. To connect to external databases 3. To map from sources to destination Service C. Flexibility of forms to incorporate non-financial data 1. Web-page form templates / Web authoring software 2. Excel-based form templates Performance Budget Planning Community

13 Implementing a budget system 11.Focus on budget process improvement A. New software should open doors 1. Use found time wisely 2. Shift in work from handling spreadsheets to analysis 3. Cross and upskill departmental and Budget Office staff 4. Consider new analytical exercises 5. Try changes in sequence 6. Deepen review of hard-to-control costs

Implementing a budget system 12.Project duration / Resource requirements A. Directly scope-driven B. Pair Budget Team with IT / Consultants 1. Part-time project management 2.

14 Implementing a budget system 12.Project duration / Resource requirements A. Directly scope-driven B. Pair Budget Team with IT / Consultants 1. Part-time project management 2. 1 functional lead key resource 3. 1 technical lead key resource part-time functional and technical resources C. Typical duration = 6-12 months D. Ideal timing = Functional design during the off season

15 Implementing a budget system 13.Consider a Foundation and Extension Approach Foundation Extension 1 Extension 2 Extension 3 Personnel Costs Internal Service Operating Budget CIP Grant Planning Long-Range Forecasting Performance- Informed Budgeting

Maximizing the value 14. Built-in interactive analytics A. Analytics & dashboard software is advancing quickly 1. Visualizations inside and around the budget system B.

16 Maximizing the value 14. Built-in interactive analytics A. Analytics & dashboard software is advancing quickly 1. Visualizations inside and around the budget system B. Enable ad hoc What-If analysis during forecasting & budgeting 1. Encourage people to ask questions and find answers 2. Make tools available 3. Train staff to use tools

Maximizing the value 14.Extend to Strategic Planning A. Service Planning 1. Catalog programs and services 2. Facilitate program review 3. Document service value 4.

17 Maximizing the value 14.Extend to Strategic Planning A. Service Planning 1. Catalog programs and services 2. Facilitate program review 3. Document service value 4. Forecast community service needs B. Service Monitoring 1. Community conditions 2. External constraints to the strategic planning process 3. Organizational performance

18 Getting the Most Out of a Budget System Government Finance Officers Association Conference May 21, 2017 Lawrence E. Stone Assessor, Santa Clara County

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22 Role of budget Budget as policy document More than priorities: Results Define service levels with measures: Quantity Quality Cost 22

23 Results of culture change Staff delivers results Elected officials don t micro-manage Staff empowered to innovate for results Disciplined approach to long-term planning 23

24 Sunnyvale demanded accountability 1. How many lane miles swept, at what cost per mile, and at what standard of cleanliness? 2. How many minutes for an emergency vehicle to respond to a 911 call, and at what cost per call? 3. How many building permits processed in a given turn-around time, and at what cost? Sunnyvale measured not only how long it took to respond to 911 calls, but what effect the response rate had on the crime rate. 24

25 BEFORE!! 25

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27 THEN CAME THE MOVE! 27

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29 Benefits of cost accounting Allocate resources based on need Establish performance metrics Identify opportunities for efficiency Achieve increased productivity Improve customer service 29

30 Elements of our cost accounting system Hours spent for each activity Labor costs for each activity Added value for each activity 30

31 Labor costs for each activity Upload data from Kronos and PeopleSoft systems Integrate the data with Journyx database Upload all the labor hours and costs into the Cost Accounting application 31

32 Added value for each activity Added value for changes of ownership, new construction, audits, and other assessment activities At risk value for assessment appeals 32

33 Top ten activities in total hours worked Top ten activities with highest added value 33

34 Business audits Audits Number of Units Hours Per Unit Cost Per Unit Average Value Per Unit Property Type Class ,539 $ 58,820,079 Class ,942 $ 1,162,305 Class ,311 $ 295,600 Non-Mandatory ,303 $ 117,548 COOP-Out ,933 Total ,787 $ 4,841,703 New Construction Number of Permits Permits with Value Added Hours Per Unit Cost Per Unit Average Added Value Per Unit Residential 22,652 6, $ 677 $ 166,138 Multi-Family 1, $ 2,632 $ 24,042,170 Comm'l/Industrial 9, $ 4,832 $ 11,089,720 Total 33,230 6, $ 908 $ 1,007,836 The average residential new construction added $166,138 in assessed value The average multi-family new construction added $24,042,170 in assessed value. 34

35 Assessor production hours compared to

36 Published Cost Accounting Report 36

37 13% Increase in Building Permits 37

Projected Production Hours for 2017-2018 INCREASES: New

38 Projected Production Hours for INCREASES: New construction Deed processing Transfers DECREASES: Appeals Prop 8 s 38

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40 David Osborne: Truisms What gets measured gets done. If you don t measure results, you can t tell success from failure. If you can t see success, you can t learn from it. If you can t recognize failure, you can t correct it. 40

41 Fundamental Questions 1. What business are you really in? 2. What are you really trying to achieve? 3. How do you know you re achieving it? 41

42 Changing Culture is Difficult Very Difficult! 42

43 Change System and Culture Culture change begins at top Long-term commitment Communicate clear Mission System to identify & reward desired results Clarify & strengthen roles and expectations Elected officials Administrators 43

44 Questions? Office of the Assessor Santa Clara County Budgeting System Practice LSI Consulting Lawrence E. Stone, Assessor Charles Collins, Director 44

Budget FREQUENTLY ASKED QUESTIONS. August 7, Budget Configuration and Dashboard Information What is Budget?...1

Budget FREQUENTLY ASKED QUESTIONS. August 7, Budget Configuration and Dashboard Information What is Budget?...1 Table of Contents Configuration and Dashboard Information... 1 1. What is?...1 2. What are the benefits of?...1 3. Who is for?...2 4. What data informs?...2 5. In what markets is available?...2 6. What