21 October 2014

2
R E A L D E L D E G A N
I N T E R I M D I R E C T O R
O F F I C E O F T H E B U D G E T
21 October 2014

3
 The “Big” Picture
 Impact of academic units on University revenues
 Building the University’s budget
 Academic units and the budget process

The Big Picture: Total Operating Revenues estimated at $768.8M for FY2015
4
$’000
Short-term investments,
3,007, 0.4%
Endowment investments,
1,913, 0.2%
Tuition and student charges;
254 468; 33,1%
MESRSoperating grant,
361,202, 47.0%
Gifts and bequests;
5 240; 0,7%
Sales of Goods
& Services ;
117 530; 15,3%
FICOR; 25 400;
3,3%

The Big Picture: Total Operating Expenses estimated at $775.8M for FY2015
Special Projects; 9 000 ;
1,2%
5
Pay Equity Phase 2;
6 350 ; 0,8%
$’000
Academic Salaries;
227 129; 29,3% Non-Salary
Expend.;
150 819; 19,4%
Net I/F Transfers out ;
54 500 ; 7,0%
Benefits; 81 718; 10,5%
Student Salaries; 9 985;
1,3%
Student Aid; 27 623;
3,6%
Admin & Support
Salaries; 208 664;
26,9%

140 000
120 000
100 000
80 000
60 000
40 000
20 000
0
6
Apr-14 Apr-13

See handout
7

Impact of academic units on University revenues
8
 Enrolment changes
 Research
- Indirect costs of research
- CRC / CFI allocation calculations
 Endowments / Gifts
 Specific grants / contracts / community service

9
• Enrolment Changes
• Provincial Grant
• Tuition

10
 Faculty-level (not directly with academic departments)
 Each Faculty can adopt its own specific budget process
“The Agreement”
 Reached with each Faculty stating:
 priority investments,
 targets, and
 proposed new initiatives
 Multi-year and ALL funds
 Involves performance measures
 Not just incremental

11
 Faculties prioritize requests from their academic units
 NOT done directly by the Provost’s Office

Priority-focus of the Agreement:
Open, Connected, Purposeful: McGill and the Next Five years
 Student Life and Learning
 Research
 Engagement
 A Learning Organization
 Space

 Draft agreement documents stipulated between the AP(BR) and the
Faculties (or Admin units)
- No template
- No dropdown menus and formatted sections
- No responses to documents – just one document
 Meetings between AP(BR) and units to culminate with a signed agreement by end of November/early December
 Integrating with other planning processes:
- Enrolment targets
- Academic Renewal
- Space, IT, etc.

The Agreement: What can units expect for FY2016?
 Previous year’s budget +/- allocations for the new year
 Cuts from the MESRS will continue:
 No indication of changes to the tuition framework
• assume rules remain unchanged
 No changes to FIO (ancillary fees) framework

Budget allocations:
What can an academic unit expect?
15
 Allocations are to Faculties, not directly to academic departments
 Faculties each adopt their specific budget allocation rules
 Some allocations provided:
- Academic Renewal
- Salary Policy
- Benefits
- Enrolment Driven Allocation
- Indirect Research Cost Allocation
- CFI LOF envelope (for wet lab areas)
- CRC allocation
- Graduate Student Support (through GPSO)
- Funding for specific initiatives (priority pool envelopes)

16
 Target complement for each Faculty
 TT salaries covered by central
 Related allocations include:
- Start-ups
- Endowed chair contributions
- Provostial hires
- Salary award incentive contribution
- Contribution to recruitment costs
- Moving expenses (including immigration fees)
- French courses
 Funds for salaries revert to the central pool when TT staff depart
http://www.mcgill.ca/provost/files/provost/academic_renewal__hr-budget_feed_1-oct-
2012.pdf

17
C R I S T I A N E T I N M O U T H
I N T E R I M
A S S I S T A N T V I C E - P R I N C I P A L
F I N A N C I A L S E R V I C E S

Managing the Budget and year-end results
18
 Dean has statutory responsibility for the Faculty’s budget
 But, Chairs definitely have a role
 Results (positive or negative) are carried forward to the next fiscal year
 Positive carry forwards in 1A funds (unrestricted operating) are put into a reserve at the Faculty level
 Use of the reserve funds require permission from the Provost


-
-
-
-
-
-
The Financial Budget Template is used for submitting the agreed upon multi-year and multi-fund planning has an Excel-based tool capturing all revenues and expenditures per org provides an overview of the spending capacity on a multi-year, multi-fund basis (e.g., provision of carry forward for future expenditures) allows a financial plan aligned with the Agreement is aligned with the Budget Book and Financial Statements must be completed by the Faculty Financial Officer with input from various
Faculty/Unit members, upon request


Enables stewardship and management of all fund types
-
Allows for variance analysis:
Budget allocations vs. Actuals by account grouping




-
-
-
Forecasting is not an “exact science” a projection into the time period(s) under consideration based on assumptions, previous experiences, and reasonable expectations
-
-
-
-
-
-
-
FFO must consult with VP, Dean, Chairs, Directors, professors, others for input be familiar with your Unit’s historical data (prior year actuals) have supporting documentation and estimates proactively seek information from professors, researchers and fund holders plan for the use of carry-forwards and ensure that these are included the
Agreement
Remember that the FBM must cover 3 fiscal years of budget includes ALL fund types

 Reports for Variance Analysis with:
Recording of changes relative to the Budget (e.g., Academic
Renewal Plan)
Adjusted Budget (if applicable) versus Actual
Actual to Actual
 Enables a more accurate analysis of the financial situation
 Close coordination with FFO/FST

 FBI website: www.mcgill.ca/fbi
 FBI reports: http://www.mcgill.ca/fbi/support/reportstools
 FAQ ’s :http://www.mcgill.ca/fbi/faqs
 fbi.budget@mcgill.ca


-
-
-
PCard default FOAPAL
Tri-Agency funds will no longer be accepted as default funds
Requires an alternate default fund for all Pcards
Communications are going out and most successful to date
 Picture Receipts
Change in procedure for Research Grants and Contracts only
Effective 15 November 2014, all expense claims submitted on research grants/contracts must include original receipts for reimbursement
Capturing pictures of receipts with an iPhone is not considered an acceptable substitute for original receipts when charging research grants and contracts

 Can my unit increase its enrolment-driven budget by accepting more graduate students?
 Are there resources available to fund teaching for new graduate programs?
 What mechanisms in place for funding the development of new initiatives and programs?

25
- Current allocations for FTE changes for regulated students:
Faculty
Agric & Env Sc
Arts
CCE
Dentistry
Education
Engineering
Law
Management
Medical Residents
Medicine
MSE
Music
Relig. St.
Science
Ugrad
$3,500
$2,400
$2,400
$9,000
$2,400
$3,000
$2,400
$2,400
$3,500
$3,000
$3,500
$2,400
$3,000
Masters PhD
$6,000 $11,000
$4,000
$3,600
$7,500
$6,000 $11,000
$4,000 $7,500
$5,000 $11,000
$4,000 $7,500
$3,600
$4,000
$7,500
$6,000 $11,000
$4,000
$5,000
$4,000
$7,500
$7,500
$6,000 $11,000

 Unionization is increasing our costs for TAs and possibly lecturers, but our budgets are not increasing. What can we do?
 My unit pays a number of course lecturers, and
McGill’s hourly rates are not as competitive as some of our neighbours’. How can I best manage this situation?

 Is budget-interpretation training offered to new chairs/directors?
 What are chairs/directors expected to do when it comes to reviewing budget reports and statements?