Finance Forum
28 November 2012
Welcome & Overview
• David Sturgiss
Overview
• Welcome and Overview
David Sturgiss
• Update: F&BS Review
David Sturgiss
• ANU Risk Management and Assurance services Leslie Hyland
• Morning tea
•
•
•
•
•
Chart of Accounts Review
AFS 2012
2013 Budget
Travel transactions - descriptions
LAFHA – Update
Peter Shipp
Rachelle Conry
Melissa Abberton
Ron Robertson & Marg E
Luke Beckett
Update: F&BS Review
The response from F&BS to the 2012
review can be found at:
• About ANU, Administration reviews
website or
• accessed directly at: Implementation
Plan (PDF, 134KB)
F&BS Implementation Plan
• F&BS has responded to all 16
recommendations;
• The plan outlines the review
recommendations, tasks associated with
achieving the recommendations and identifies
timeframes, Task/Project Manager, and
Performance Indicator/progress.
• The Implementation Plan is a high level
summary of the actions that require
implementation over the next six to twelve
months.
F&BS 2013 Operational Plan
Specific details of related projects can be
found in the F&BS 2013 Operational Plan
which will be available on our website
early next week at: Finance & Business
Services » About F&BS
(Projects specifically in response to review
recommendations are numbered 1 -16/IP)
Expected Outcomes of the
Implementation Plan
• Improved financial management reporting with greater
data integration and enhanced utility by consistency in
both reporting content and presentation;
• Improved finance administrative management functionality
and expertise across campus as a result of ensuring
appropriate staff are recruited and placed in finance
management positions with consistent Position
Descriptions and Statement of Expectations and the
delivery and engagement in the practice leadership
program including staff rotations;
Expected Outcomes of the Implementation
Plan (cont)
• Clarity around roles, responsibilities and delegations
between Colleges and the Division;
• Improved measurement in the outcomes of F&BS activities;
• Financial benefits/savings to the University generally
through the implementation of standardised service and
product providers of basic commodities;
• Improved communication strategy both within the Division
and the University community more generally; and
• By our engagement with the EDAP an improved and
integrated whole of University framework for technology
enabled business processes.
ANU Risk Management and Assurance
services
• Leslie Hyland
Risk Management & Audit
Presentation to Finance Forum
Presented by: Leslie Hyland
Director of Risk Management and Audit, Office of the Vice-Chancellor
November 28 2012
Objectives
1.
The ANU Risk Awareness Framework— Enterprise Risk
Management
2.
The ANU Audit Program – Assessing Risk Management & Control
Frameworks
3.
ANU Governance – Risk Management and the Tone at the Top
4. Fraud Risk— ANU Fraud Control Framework
5. ANU ERM: Risk Management & internal Controls Integrated
Framework & TEQSA : Next Steps
11
1. The ANU Risk Awareness Framework—
Enterprise Risk Management
1.1 What is Enterprise Risk Management (ERM)?
1.2 ANU Risk Awareness Framework
1.3 Understanding the Three Categories of Risk
1.4 What is our Approach
1.5 Developing a Risk Management Plan – AS/NZS
ISO 31000:2009
12
1.1 What is Enterprise Risk Management
(ERM)?
This is a structured and disciplined approach
aligning strategy, process, people, technology and
knowledge for the purpose of evaluating and managing
uncertainties that the entity faces as it creates value.
“This is one small step for man, one giant leap for mankind”. Neil Armstrong, Apollo 11 first moon walk, July 21
1969
13
1.2 ANUs Risk Awareness Framework
ERM is not about being more risk averse.
It is about being more risk aware.
Risk Awareness Principles
Protect against
unforeseen loss
RISK = THREAT
Category 1 Risk =
Preventable Risks
Optimise Opportunities
Ensure stability
RISK = OPPORTUNITY
RISK = UNCERTAINTY
Category 2 Risk =
Strategic Risks
Category 3 Risk =
External Risks
14
1.3 Understanding the Three categories of Risk
The Three Categories of Risk
Category 1= Preventable Risks
Category 2= Strategic Risks
Risks arising from within the entity that generate no
strategic benefits
Risks that are taken for superior strategic results
Category 3= External Risks
Risks that are external to the entity and therefore are
uncontrollable
Risk Mitigation Objective
Avoid or eliminate occurrence cost-effectively
Reduce likelihood and impact cost-effectively
Reduce impact cost-effectively should risk event occur
Control Approach
Integrated culture-and-compliance model
Develop mission statement; values and belief systems;
Standard operating procedures;
Internal controls;
Internal audit
Interactive discussions about risks to strategic objectives
drawing on tools such as:
Maps of likelihood and impact of identified risks;
Key risk indicator scorecards;
Resource allocation to mitigate critical risk events
“Envisioning” risks
Risk assessments and “stress testing;
Scenario & simulation planning
Role of Risk Management Staff
Coordinates, overseas, and revises specific risk controls
with internal audit function
Runs risk workshops and risk review meetings;
Helps develop portfolio of risk initiatives and their funding
Acts as “devil’s advocate”
Runs stress-testing, scenario & simulation planning with
management team;
Acts as “devil’s advocate”
Relationship of the Risk Management Function to
Business Units
Act as independent overseers
Act as independent facilitators, independent experts, or
embedded experts
Complements strategy team as independent facilitators of
“envisioning” exercises
By Robert S. Kaplan & Anette Mikes, Harvard Business School
15
1.4 What is our approach?
A consistent approach to risk management across the university and at
all levels of operations
ANU Wide Risks
• Enterprise wide view of risks facing the ANU:
ANU Risk Profile
• Risk profiles for ANU Colleges & Service
Divisions
• Risk profiles for Halls of Residences
College / Division Risks
• Risks assessments as part of grant applications
and project initiation documents
Projects & Grants
“Risk Management is not intuitive; it runs counter to many individual and organizational biases. Rules and compliance can mitigate
critical risks but not all of them. Active cost-effective risk management requires managers to think systematically about the multiple
categories of risks that they face so that they can institute the appropriate processes for each. These processes will neutralize their
managerial bias of seeing the world as they would like it to be rather than as it actually is or could possibly become.” Robert S.
Kaplan and Anette Mikes, Harvard Business School
16
1.5 Developing a Risk Management Plan –
AS/NZS ISO 31000:2009
Risk Management Process
• Studies have found that people overestimate
their ability to influence events, and that there is
a tendency to be overconfident about the
accuracy of forecasts and risk assessments and
far too narrow in assessment of the range of
outcomes that may occur.
• Organizational biases also inhibit people’s ability
to discuss risk and failure. There is a tendency
to normalize deviations as people learn to
tolerate apparently minor failures and defects
and treat early warning signals as false
positives.
• Effective risk management must counteract the
above biases. It must allow the establishment of
a risk culture that enables people feeling
comfortable thinking and talking about risk.
• Effective risk management enables people to
talk about strategy by challenging existing
assumptions and debate risk information.
Establishing the context
Risk Assessment
Risk Identification
Communication
and
Consultation
Monitoring
and
Review
Risk Prioritisation
Risk Response
Risk Treatment
17
1.5 Developing a Risk Management Plan –
AS/NZS ISO 31000:2009, continued
4 Steps:
i. Risk Identification
Think broadly about the risks associated with the project, grant and/or activity.
Elements include: Risk category, Risk description, Risk owner, Cause of risk.
ii.
Risk Prioritisation
Using the risk rating criteria, assess the probability of the risk occurring (likelihood)
and the consequence of the risk occurring (impact).
Start by assessing the current risk, then determine the residual risk.
The current risk is the risk facing the entity, project and/or grant at the moment, with
operations running as ‘business as usual’ prior to being treated.
The residual risk is the risk remaining after all treatment strategies have been put in
place.
18
1.5 Developing a Risk Management Plan –
AS/NZS ISO 31000:2009, continued
iii. Risk Response—What is being done to manage the Likelihood &/or Consequences of
the risk (strategies, policies, procedures, reviews, inspections etc.) should be directed
towards the previously identified cause(s) of that risk . The response could be:
Avoid – do something to remove the risk
Transfer – make someone else (e.g. vendor) responsible
Mitigate – take actions to lessen the impact or likelihood of risk occurring
Accept – stakeholders (including the appropriate delegate) may agree that the
risk is at an acceptable level that the effort to take further action is not worthwhile
iv. Risk Monitoring—Establish an Action Plan to continually monitor risks to identify any
changes in status and add/remove risks
“Risk mitigation is painful, not a natural act for humans to perform.” Gentry Lee, Chief Systems Engineer, Jet Propulsion Laboratory
(JPL), NASA.
19
Categories
included
within the
most up-todate of the
organization’
s Risk
Exposure
Profile, for
example
Strategic,
Reputational
/Brand,
Marketrelated,
People,
Ethical,
Operational,
Environment
al, Funding,
etc.
This is a
brief
description
of the risk
being
analysed
This is the
official with
overall
accountabilit
y for
managing
noted risk
It is
important to
know the
cause(s) of a
risk in order
to develop
strategies to
manage that
risk e
This is an
assessment of
how likely
the risk is to
occur before
strategies
and/or
controls are
in place e.g.
Unlikely to
Almost
Certain,
based on
Risk
Ranking in
use by the
entity
This is an
assessment
of the impact
if the risk
occurred e.g.
Minor to
Significant,
and this can
be in
financial
reputational,
personal
safety, etc.
terms
A predetermined
scale (matrix)
gives a risk
rating from
Minor to
Severe based
on these (see
previous)
Likelihood &
Consequence
assessments
What is
being done to
manage the
Likelihood
&/or
Consequence
s of the risk
is shown here
and these
actions
(strategies,
policies,
procedures,
reviews,
inspections
etc.) should
be directed
towards the
previously
identified
cause(s) of
that risk
This is a reassessment of
how likely
the risk is to
occur now,
after
strategies
and/or
controls are
in place and
their
effective
ness is
considered
This is a reassessment of
how serious
the impact
now is, again,
after the
existing
controls are
considered
Using the
same scale as
previously,
the ‘leftover’ risk is
now rated
for
acceptability
or to indicate
that further
action is
required
Action Plan
Residual
Risk Rating
Risk
Consequence
Risk Likelihood
Management
Controls on
Risk
Inherent Risk
Rating
Risk
Consequence
Risk Likelihood
Cause of Risk
Risk Owner
Risk
Description
Risk Category
1.6 Risk Management Plan Elements
If further
action is
required (i.e.
the level of
risk remains
un-accept
able even
after
strategies
and/or
controls are
in place),
that action is
shown here
along with
the
responsible
entity &
timeframe
for action
20
2. The ANU Audit Program – Assessing effectiveness of
operations, risk management, control and governance
processes through the following activities:
2.1 Internal Audit –What we do and its
relationship to ERM
2.2 External Audit– Value Proposition
2.3 Audit Follow-Up– Maturity of ERM
2.4 The ANU Audit & Risk Management
Committee
21
2.1 Internal Audit
• Conducted under the Professional Standards contained in the
International Standards for the Professional Practice of Internal
Auditing issued by the Institute of Internal Auditors, and the
Accounting Professional Ethical Standards Board.
• Guided by a Charter
• Systematic and disciplined approach
• Risk-based annual Internal Audit Plan and audit engagements,
including compliance-based assurance audits, performance
improvement audits, advisory audits and comprehensive audits.
• Internal Audit Plan topics are selected on the basis of interviews key
University stakeholders and evaluation of prior year (s) audited
topics and results.
22
2.1 Internal Audit & ERM
Core Internal Audit Roles Regarding ERM:
Legitimate Internal Audit Roles with Safeguards:
Giving assurance on the risk management processes
Facilitating identification & evaluation of risk
Giving assurance that the risks are correctly evaluated
Coaching management’s response to risk
Evaluating risk Management Processes
Co-ordinating ERM activities
Evaluating the reporting of key risks
Consolidate report on risks
Reviewing the management of key risks
Maintain & develop ERM framework
Roles that Internal Audit Should Not Undertake:
Champion establishment of ERM
Setting risk appetite
Developing RM strategy for Council approval
Imposing Risk Management Processes
Management assurance on risks
Taking decisions on risks responses
Source: Institute of Internal Auditors (IIA)
Implementing risk responses on management’s behalf
Accountability for risk management
23
2.2 External Audit – Value proposition:
Enhancing Sound Governance
•
Australian National Audit Office (ANAO) annual financial statement audit
certification (provided in the form of the ANAO audit opinion)—the
external audit provides independent assurance that University financial
statements are properly prepared in accordance with set standards in all
material respects.
•
Grant funding sponsors audit requirements: external auditors are
engaged to evaluate the University’s compliance with set funding
sponsors’ agreed-upon standards. The engagement is equivalent to that
done through the Internal Auditor. The difference here is the oversight of
the audit is done by an external audit manager.
• Australian Commonwealth Government Entities’ Compliance Audits
• The United States Government Financial and Compliance Audits
• The European Commission Compliance Audits
• Other entities funding ANU operations
24
2.3 Audit Follow-Up: Maturity of ERM
•
ANU is obligated to address/resolve audit-related findings in
accordance with requirements set by the Australian National Audit
Office (ANAO), Grant funding sponsors including the Australian
Commonwealth Government Entities, The United States Government,
The European Commission, other as appropriate
•
Progress towards resolution is monitored & reported to the Audit & Risk
Management Committee and Council.
•
Audit findings are risk-rated per set risk rating guidelines endorsed by
the Risk Management & Audit Office as it relates to “inherent risk” and
“residual risk”.
25
2.4 The ANU Audit & Risk Management
Committee (ARMC)
•
The Commonwealth Authorities and Companies Act 1997 (the CAC
Act) obliges the University to have an Audit Committee.
•
The Audit and Risk Management Committee advises the University
Council on the quality of audits conducted and the adequacy of
administrative, operating and accounting controls and compliance with
relevant legislation and policies.
•
The committee also oversees risk management planning and
implementation.
•
The committee consists of five non-executive members, of which at
least one is a member of Council.
•
The Audit and Risk Management Committee Charter outlines the roles
and responsibilities of the committee, is approved by Council and
reviewed annually.
26
3. ANU Governance –
3.1 Risk Management and the Tone at the Top
3.2 Risk Management and Going beyond the
basics
27
3.1 Risk Management and the Tone at the Top
• The “tone at the top” plays a critical role in establishing and maintaining
ethical and accountable work environments within an organization;
• The tone at the top is the ultimate responsibility of the organization’s
leadership, lead from the top, by giving consistent messages on the
importance of quality, shared at every level.
• The ANU Governance framework includes Legislation, Policies,
Delegations that are overseen, managed and implemented through:
• Council
• Committees of Council ( Audit & Risk Management Committee,
Finance Committee, Academic Board)
• University Committees
• University Management
“An entity’s ability to weather storms depends on how seriously executives take risk management when the sun is shining and no
clouds are in the horizon.” Robert S. Kaplan and Anette Mikes, Harvard Business School.
28
3.2 Risk Management and going Beyond the
Basics
•
•
The Basics-- the ANU invests in rules-based risk management system that
has worked well in aligning values, risks and controls
Going Beyond the Basics–
• ANU by 2020, the Strategic Plan, is the vehicle by which the university
has identified its overarching strategic goals
• The ANU Operational Plans are the vehicle towards managing inherent
strategic and operational choices and/or the risks that are posed by
internal and external environments
• Managing risk is very different from managing strategy; the former
focuses on the negative, such as failures rather than opportunities and
successes. It runs exactly counter to the “can do” culture most leadership
teams try to foster when implementing strategy.
“When Tony Hayward became the CEO of BP, in 2007, he vowed to make safety his top priority. Among the new rules he instituted were the
requirements that all employees use lids on coffee cups while walking and refrain from texting while driving. Three years later, on Hayward’s
watch, the Deep-water Horizon oil rig exploded in the Gulf of Mexico, causing one of the worst man-made disasters in history. A U.S.
investigation commission attributed the disaster to management failures that crippled “the ability of individuals involved to identify the risks they
faced an to properly evaluate, communicate, and address them.” Robert S. Kaplan and Anette Mikes, Harvard Business School.
29
4. Fraud Risk— ANU Fraud Control Framework
4.1 What is Fraud
4.2 Types of Fraud --Examples
4.3 Fraud Prevention
4.3.1 Leadership and Culture –ANAO Better
Practice Guide
4.4 Fraud Detection
4.4 Responding to Detected Fraud
30
4.1 What is Fraud?
The ANU has adopted the following definition of fraud
as advocated by the Australian Commonwealth
Government’s Fraud Control Guidelines 2011:
“Dishonestly obtaining a benefit, or causing a loss, by
deception or other means”
“ The ANU will seek to prosecute those who perpetrate frauds against it.” Risk Management and Audit , Fraud
Control Procedure, 2012
31
4.2 Types of Fraud—Examples
Manipulation of records;
Theft of inventory, plant and equipment;
False invoicing by a staff member or a person external to ANU claiming payment for goods or
services not delivered or exaggerating the value of goods or services delivered;
Theft of cash or funds other than by false invoicing;
Any form of cheating;
Conflict of interest;
Misappropriation or misdirection of remittances received from a debtor;
Loan application to student made in a false name and false documentation;
Theft of intellectual property;
Falsification of research results;
Financial fraud involving grant funds;
Engaging in transactions of self interest rather than interests of the entity;
Lack of employment screening controls;
Nepotism and cronyism when employing personnel;
Falsification of qualifications;
Collusive tendering;
Falsification of financial transactions;
For additional examples please follow this link:
http://policies.anu.edu.au/procedures/fraud_control/procedure
32
4.3 Fraud Prevention—Attitude to Fraud—Zero
Tolerance
Elements in the ANU Fraud Prevention Framework:
•
•
•
•
•
•
•
•
Code of Conduct
ANU Fraud Control Plan & Procedure
Fraud Risk Profiling and Management Activities
Control Framework: ANU Policies, Procedures, Guidelines and Monitoring
Activities conducted at all levels
Internal Audit
External Audit
Continuous Monitoring Program through computer assisted audit techniques
Fraud Control Booklet—”Protecting ourselves from Fraud”
• http://risk.anu.edu.au/docs/Staff_Fraud_Booklet.pdf
“A ‘top-down’ and ‘bottom-up’ approach to fraud control can help ensure an organisation’s policies, governance
structures and processes for managing fraud risks are consistent and mutually reinforcing.” ANAO Better Practice
Guide
33
4.3.1 Leadership and Ethical Culture
Leadership
and Culture
Key Points:
• Strong executive leadership is integral to effective
fraud control within organizations
• If staff perceive that controls to respond to fraud are
not robust or supported by management, they are
much less inclined to report it
• To keep astride of emerging fraud risks, the entity
must embed fraud control prevention activities into
its day-to-day activities at all levels
• The establishment of an ethical culture is a key
element of sound governance and plays an
important role in preventing fraud and helping to
detect it once it occurs
Governance:
Policy &
Legislation
Prevention,
Detection,
Response,
Monitoring,
Evaluation
and
Reporting
Fraud
Control
Strategies
“When it comes to leadership, we can take comfort that nobody is perfect but there are accepted norms to guide us.” Ian
McPhee, Auditor General of Australia
34
4.4 Responding to Detected Fraud---Key
Points
•
•
•
•
•
•
Fraud investigation and response are key to providing stakeholders with reasonable
assurance that perpetrators of fraudulent acts are identified, and appropriate
remedies are consistently applied.
Australian Government entities are required to comply with the Fraud Control
Guidelines which meet minimum standards for investigations set out in the Australian
Government Investigations Standards.
Under the Fraud Control Guidelines, entities are required to investigate minor and
routine instances of fraud, irrespective of whether the outcome of the investigation
results in an administrative remedy or is referred for prosecution consideration.
Matters involving serious and complex fraud must be referred to the Australian
Federal Police.
Prosecutions are important in deterring future instances of fraud and in educating the
public generally about the seriousness of fraud.
Entities should be committed to recovering financial losses caused by fraud through
proceeds of crime and civil recovery processes or administrative remedies.
“ Character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing”.
Abraham Lincoln, President of the United States of America (1861-1865)
35
5. ANU ERM: Risk Management & Internal
Controls Integrated Framework & TEQSA :
Next Steps
Photo source, NASA
36
5.0 TEQSA: Regulatory Risk Framework & Impact to the
ANU Risk Management Framework
- TEQSA is being incorporated to the ANU Risk
Management Framework, to acknowledge its existence
- Risk Management Policy, Procedures & Tools are
being updated to reflect the existence of the TEQSA
Framework
- ANU Internal Audit Planning Approach is being
informed with TEQSA Regulatory Risk Framework &
enable coverage in 2013 audit assurance activities,
consistent with the ANU ERM approach
37
5.1 ERM View: Integration of Risk Management
& Internal Controls: the COSO Integrated
Framework
• The Committee of Sponsoring Organizations
of the Treadway Commission (COSO) is a
joint initiative of five private sector
organizations dedicated to providing thought
leadership through the development of
frameworks and guidance on enterprise risk
management, internal control and fraud
deterrence. http://www.coso.org/
• COSO Integrated Framework assists U.S.
entities (Governmental and Corporate) better
control enterprise-wide operations.
• The elements of the COSO framework are in
all types of entities and therefore its
applicability across sectors.
• Integrated internal controls can help entities
achieve its performance and profitability
targets, and prevent loss of resources.
Internal control cannot ensure the entities’
success, but can at the very least help
achieve basic success and potentially its
survival.
There is a fourth dimension to the above representation of ERM: the data that informs, in an integrated way, every aspect of the
organisation’s Strategic , Operational, Reporting and Compliance activities. Successful organisations are those that are “data rich
and information rich”, as opposed to “data rich and information poor”.
38
References:
1)
2)
3)
4)
ANU Risk Management & Audit website--http://risk.anu.edu.au/
Managing Risks: A New Framework, by Robert S. Kaplan and Anette Mikes,
Harvard Business Review, June 2012
Australian National Audit Office (ANAO) Better Practice Guide: Fraud Control
in Australian Government Entities, March 2011
COSO Integrated Framework
39
Morning Tea
Recommence in 20 minutes
Chart of Accounts Review
• Peter Shipp
Currently a review of some natural account
codes is underway. College/Division Finance
Managers are participating in this process. A
small number of changes are anticipated for
2013.
AFS 2012
• Rachelle Conry
AFS 2012
• Year End Systems Timetable
• Year End made easy
AFS 2012
• http://fbs.anu.edu.au/reporting/financialreporting/annual-financial-statementbasics
– AFS Pack 2012 - Instructions
– AFS Pack 2012 - Schedules
– Year End journal rules
– Accounting periods 2013
– Year End system dates 2012
44
AFS 2012 – Systems Timetable
• Friday 7 December:
– Plant & Equipment Schedules
– Store Stock Schedules
– Last day for adjustments in Asset
Management System
• Friday 14 December:
– Last day for Vendor Additions
AFS 2012 – Systems Timetable
• Wednesday 19 December:
– Pay 26 to be sent
– Last AP runs for 2012 (draft, chq & TT)
– Last day for AR invoices
– Last day for banking foreign drafts
AFS 2012 – Systems Timetable
• Thursday 20 December:
– Last AP EFT run for 2012
– Last day for direct debits for Halls &
Colleges
– Last day for Courier Run
– Pay 26 re-banks
– Last opportunity to run Outstanding
Encumbrances Report for 2012 data
AFS 2012 – Systems Timetable
• Thursday 20 December (cont.):
– Last day for AP Vouchers for 2012
– Last day for entering ACTUALS,
FINANCIAL & STD_BUDGET Journal
– Access to ESP Financials closed at 5pm
AFS 2012 – Systems Timetable
• Friday 21 December:
– All receipting points must be deposit listed
by 11am
– Access to One-Stop (Receipting) closed at
11am
AFS 2012 – Systems Timetable
• Wednesday 2 January:
– One-Stop reopened after 10am
– ESP Financials reopened after 12 noon
– First day for Vendors & AR Invoices after
12 noon
• Thursday 3 January:
– First AP runs (EFT, TT, draft & chq)
AFS 2012 – Systems Timetable
• Friday 11 January:
– Last day for year end journals
– All AP vouchers received in 2013 relating to
2012 goods & services should be
processed by 5pm
– All AR invoices relating to 2012 goods &
services should be processed
– All other AFS Pack Schedules due
AFS 2012 – Simple!
• We’ll send out email reminders about
the key dates
• Minimise surprises
• Stocktakes (P&E and Stores)
• WIP – review before year end
• 7000, 8000 and Asset Reconciliations
• Chasing 2012 invoices
QUESTIONS?
2013 Recurrent Budget
• Melissa Abberton
ANU
2013 Recurrent Budget Model
• Process is led by the Vice-Chancellor
and managed by the Executive
Director (Administration and
Planning).
• Assisted by Vice-Chancellor’s budget
sub-committee
Members of the Budget Sub Committee
for 2013
• Vice-Chancellor
• Deputy Vice-Chancellor (Research)
• Deputy Vice-Chancellor (Academic)
• Executive Director (Administration and Planning)
• Chief Finance Officer
• College Representative – College Dean
• Executive Officer, Administration and Planning
2013 Recurrent Budget Timetable
• 20 November – Draft Budget Information
Packs issued to Colleges
• 23 November 2012 - 2013 budget considered
by Finance Committee
• 30 November 2012 – Preliminary 2013 budget
information loaded into TM1
• 7 December 2012 - 2013 budget presented to
Council for approval
• Post-Council Approval- Final Budget
Information Packs issued
2013 Commonwealth Income Allocations
The following Commonwealth funding will be
allocated using a mixture of performance and
historical measures.
• National Institutes Funding (NIF)
• Commonwealth Grants Scheme (CGS)
• Higher Education Loan Program (HECS Help)
• Research Training Scheme (RTS)
• Research Infrastructure Block Grant (RIBG)
• Joint Research Engagement (JRE)
• Sustainable Research Excellence (SRE)
2013 Research Block Grant Allocations
In 2013 the following income was allocated using a
model developed by Aaron Ballagh from Research
Services Division.
•
•
•
•
Research Training Scheme (RTS)
Research Infrastructure Block Grant (RIBG)
Joint Research Engagement (JRE)
Sustainable Research Excellence (SRE)
2013 Recurrent Budget
Other Principles and Parameters
2013 Salaries and On Costs
Superannuation
17.00%
Workers compensation
1.50%
Payroll tax
6.85%
Annual leave loading
1.34%
Long service leave levy 2.00%
Pay 27 levy
1.36%
Other Principles and Parameters
Student Fees
International Student Fees
Colleges
Overhead
Agents Commission
Load
EFTSL
Fees
2.00%
5.00%
54.00%
24.00%
3.50%
Capital
College Capital Fund
Statutory and Preventative Maintenance
Building Infrastructure Fund
Total Capital Deduction
Total
Domestic Student Fees
Colleges
Overhead
Capital
Building Infrastructure Fund
Total
5.00% UNCHANGED FROM 2012
3.00%
10.50%
18.50%
100.00%
Load
EFTSL
5.00%
Fees
5.00%
70.00% OVERHEAD INCREASED BY
25.00%
1%
5.00%
100.00% NEW CAPITAL DEDUCTION
Other Principles and Parameters
OFF THE TOP DEDUCTIONS
Deduction
Amount
Q94 Maintenance Levy
$
7,705,000
Music Support
$
1,645,000
Art Support
Languages Support
- Persian, Turkish & Arabic (CASS)
$
1,645,000
$
150,000
- Asian Languages(CAP)
$
2,350,000
Access & Collections
IT Projects
Total Off the Top Deductions
$
$
$
2,100,000
5,000,000
20,595,000
Comment
unchanged from
2012
unchanged from
2012
unchanged from
2013
new in 2013
unchanged from
2012
unchanged from
2012
$2 mill in 2013
Other Principles and Parameters
UPFRONT DEDUCTIONS
In the 2013 budget charges for utilities and
network services charges will be deducted
from the operating grant upfront. Details
regarding the amount and methodology for
these charges is currently being finalised.
Full details will be advised separately and
will form part of Final Budget Information
Packs.
2013 BUDGET INFORMATION PACKS
In 2013 budget information will be distributed as a
pack rather than a single sheet. Information in the
package includes:
• A summary of 2013 assumptions
• The University Recurrent Budget Summary
• Individual advice sheets
• Detailed HECS/CGS calculations by AOU
• National Institutes allocation information
• Detailed Research Block Grant calculations and
metrics
2013 Budgets
• End November 2012 – First cut of
budgets in TM1 to enable high level
view of total ANU picture
• 18 January 2013 – Final 2013 budget to
be entered in TM1
• After 18 January 2013 - Final budget will
be loaded into ES Financials
Travel transactions -descriptions
• Ron Robertson & Marg Eichholzer
I shall be so brief that I am
already finished.
Salvador Dali
Account: 5400
Domestic Travel – Airfares
Ledger Transaction:
Airfares and booking fee
$1,268.14
Vendor:
Purchase Card Vendor
QUESTIONS?
(SOLUTIONS?)
LAFHA Update
• Luke Beckett
LAFHA Update
• LAFHA – Living Away From Home
Allowance
• Changes came into effect on 1 October
2012
• Visiting Academics most affected as no
longer can receive a LAFHA
• Flights for visitors not affected
LAFHA Update
• DTA Professor Teacher Clause ensures
payments are taxed only in home country.
No limit.
• Reimbursement of expenses tax free where
amount is not greater than ATO per diem
rates (ATO confirmed)
• Travel allowance at ATO per diem rates as
long as they are employed by somebody
• Otherwise PAYGW or FBT will apply
LAFHA Update
• Consideration must be given to:
– Length of visit
– Is visitor travelling with family
– What type of accommodation
– What visa is the visitor on and what working
rights do they have
– Is the amount to be paid more than just travel
costs (contract for service)
LAFHA Update
Example 1
• Sara visits the ANU from China for 5
months. Sara is on a visiting academic
visa with no work rights. Sara’s invitation
outlines flights up to $5,000 and living
expenses up to $15,000.
• Tax Outcome: Flights are exempt. Living
expenses are exempt as China has a DTA
[assuming Sara works on public research].
LAFHA Update
Example 2
• Tony visits the ANU from China for 3
weeks. Tony is on a visiting academic visa
with no work rights. Tony’s invitation
outlines flights up to $5,000 and living
expenses up to $3,000.
• Tax Outcome: Flights are exempt. Living
expenses are exempt as it is below the
ATO per diem for same period.
LAFHA Update
Example 3
• Joe visits the ANU from Turkey for 6
weeks to delivery a specialised course that
he has prepared. Joe’s invitation outlines
flights up to $5,000 and a fee of $15,000.
• Tax Outcome: Flights are exempt. Joe is
on a fee for service (contract) and would
need to provide no ABN statement.
LAFHA Update
Example 4a
• Denise visits the ANU from France for 12
months. Denise is on a visiting academic
visa with no work rights. Denise’s
invitation outlines flights up to $5,000 and
living expenses up to $30,000.
• Tax Outcome: Flights are exempt. Living
expenses are subject to FBT.
LAFHA Update
Example 4b
• Denise visits the ANU from France for 12
months. Denise is on a business long stay
visa with working rights. Denise’s
invitation outlines flights up to $5,000 and
living expenses up to $30,000.
• Tax Outcome: Flights are exempt. Living
expenses are ordinary income subject to
PAYGW and on-costs.
LAFHA Update
• The following flow charts have been
developed:
– Tax Implications of paying Visiting Academics
(Non-Resident)
– Is a visiting academic travelling or relocated?
• The HR policy and invitation letters have
been updated and will be available soon
LAFHA Update
Contact: Luke Beckett
X58739
[email protected]
Projects Update
• Jaya Ganasan
See http://fbs.anu.edu.au/projects for details of
Financial Management Information Systems
Refresh Program.
Next Finance Forum
?? 2013
You will be able to register through HORUS
(FBS036 Session 0005)
Close!
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LAFHA Update - Finance & Business Services