Finance Forum 29th May 2014
29 May 2014
Finance & Business Services
AGENDA
1.Introduction/F&BS Staffing Update (Peter Shipp,
Deputy Director, CFFR)
2. Research Accounting – Training & HERDC (Luke
Beckett, Mgr Research Accounting & Taxation)
3.Federal Budget Update (Melissa Abberton, AD
MR&B)
4.AP Workflow – Tips & Tricks (Trevor Langtry, A/g AD
Fin.Ops. & Systems)
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AGENDA
5.University Financial Planning Model (Natasha
Murphy, Project Manager SIG)
6.Research Accounting – Costing & Pricing Update
(Maria Davern, Program Mgr. RSD)
7.Accounting Standards – Technical Update
(Rachelle Conry, Senior Accountant MR&B)
8.General Question Time
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F&BS Organisational Structure
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Finance Forum
29 May 2014
2014 FEDERAL BUDGET UPDATE
THE BIG TICKET ITEMS
DEREGULATED FEES FOR
COMMONWEALTH SPONSORED
PLACES
CHANGES TO INDEXATION
RTS AND THE CO-CONTRIBUTION
 ARC EFFICIENCY DIVIDEND
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DEREGULATION
Main Proposals:
Universities may charge fees above the current
HECS caps from 1 January 2016.
CGS cluster rates will be cut from 1January 2016
by circa 20% but this will vary across clusters.
The number of Clusters will reduce from 8 to 5
tiers.
Scholarship Scheme will be introduced
Grandfathering arrangements will apply.
 FEE- HELP will continue but will be amended.
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CGS
 CGS cluster rates will be cut from 1January 2016 by circa
20% but in reailty this will vary across clusters.
 Clusters will reduce from 8 to 5 tiers.
 Some clusters will lead to reduced student contribution
under the proposed model:
 Humanities – 10%
 Mathematics – 29%
 Clinical Psychology & Foreign Languages – 4%
 The majority of clusters lead to an increase in student
contributions however some significantly
 Social Sciences – 59%
 Communications – 46%
 Environmental Studies – 107% !!!!!
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SCHOLARSHIP SCHEME
 $1 in every $5 (20%) of additional deregulated
revenue will be used to fund Commonwealth
Equity and Access Scholarships
Scholarship schemes will be awarded and
managed by the University
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GRANDFATHERING
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GRANDFATHERING
Status of Student
Accepts and Enrolment Offer before
14/5/14
Grandfathering Arrangement
Current arrangements until 2020
Accepts enrolment offer before 14/5/14
and defers commencement
Current arrangements until 2020
Accepts enrolment offer before 14/5/14
and is on approved leave of absence
Current arrangements until 2020
Currently supported students who finish a
course and immediately enrol in another
UG or PG CSP
Accepts and Enrolment Offer after 14/5/14
and commences before 1/1/16
Current arrangements until 2020
Current arrangements until 1/1/16 then
new arrangements until completion
Students offered enrolment in a PG
course but chose to defer before 1/1/16
Not guaranteed a CSP but if offered then
current arrangements until 1/1/16
Accepts an enrolment offer after 1/1/16
New arrangements
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FEE- HELP
 Fee HELP will continue to be made available so
there will continue to be no upfront fee payments
 However arrangements will be amended:
 Income thresholds to start repayment of HELP debt will
reduce from $53k to $51k from the 2016/17 The
repayment rate will reduce from 4% at this band to 2%
on a sliding scale
 Indexation of outstanding HELP debt will change from
June 2014
 Rate will change from CPI, currently 2.9% to 10year
Commonwealth Bond Yield, currently 3.8% but capped
at 6%
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OTHER CHANGES
 HECS/HELP benefit to support specific priority areas will
cease from 2015-16
 CGS being extended to Diploma, Sub Bachelor and Associate
degrees – no rates yet but will be below Bachelor Levels
 Lifetime borrowing for Fee Help and VET Help has ceased
 FEE-HELP loan fee on fee paying UG course removed
 VET FEE-HELP loan fee for higher level vocational courses
removed
 CGS to be extended to TEQSA certified private providers
 Relocation Scholarship Assistance for students relocating
within and between major cities removed
 Removing Grandfathering for Student start-Up scholarship
recipients
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WHAT DOES IT ALL MEAN
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CHANGES TO INDEXATION
 Basis for calculating the rate of indexation on
Commonwealth revenues will change from
1 January 2016
Currently based on HEGI but will move to CPI
 HEGI in 2015 will be 1.79%, using CPI in 2015
would have indexed revenues 2.9%.
 Affected revenues:
 NIF




HECS CGS
Commonwealth Scholarships
Research Block Grant Schemes
ARC
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RESEARCH TRAINING SCHEME
RTS reduced for 2015/16 and will
reduced $173.7M over 3 years
Sector wide 10% effect.
RTS students to be charged a
contribution at $1700 low cost courses,
$3900 high cost course per EFTS
 Unclear how these two proposals will
intersect
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ARC EFFICIENCY DIVIDEND
3.25% Efficiency Divided on all
ARC administered funding from
2015/16
Current impact estimated at
3.5% of 81M approximately
$2.9M for ANU
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OTHER RESEARCH RELATED IMPACTS
 HC Coombs Policy Funding Ceased - $6.4M
over 4 years (1.6M in 2014/15)
 Establishment of Medical Research Future
Fund on 1st Jan 2015. The divided, Net
Interest on the Capital, estimated at
$276.2M over 3 years from 1st July 2015 to
fund research including through NHMRC.
 Research funding of $3.3M for digitisation of
Indigenous Cultural Resources
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OTHER RESEARCH RELATED IMPACTS
Additional $150m NCRIS funding – 1 year
only
 Boost to Dementia Research Funding –
$200m including $26m through ARC
Cessation of ARENA
 NICTA to move to a self funding model by
mid 2016
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OTHER RESEARCH RELATED IMPACTS
 Rural Development Corporation’s will be
given additional $100m over 4 years to fund
research in partnership with RDC’s
 Continuation of Future Fellowships for midcareer researchers – $139.5m
 Amalgamating the National Environmental
Research Program and Australian Climate
Change Science Program to form a new
national environmental Science Program –
reduction of $21.7m – impacts to be
determined
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OTHER IMPACTS
 Higher Education Reward Funding ceased
 Higher Education Participation Program –
funds are to be reduced by $51.3m over 4
years
 300 additional general practitioner places –
yet to understand the terms and if ANU is
eligible
 Impact of DFAT funding cuts
 NRAS program to cease
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???????????????????????????????
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AP Workflow – Tips & Tricks
Erin Clements & Trevor Langtry
29 May 2014
29 May 2014
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Foreign Currency Processing
•
•
•
•
Can be confusing
Invoice currency & Payment currency
Need to check
Tip & Technique
http://fbs.anu.edu.au/__documents/tips_an
d_techniques/accounts-payableworkflow/2014_tip_siw_foreign_currency.p
df
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Work Flow Actions
• PushBack – Always comes back to the person who pushed it back
- even if you change the business contact or delegate
• Restart – resets each of the steps – delegate, business contact, etc.
• Deny – equivalent to putting it in the bin
• Reassign – a single step not the whole process around the team
• Step not routed can change Business Contact/Delegate without
restart
• Intsert Additional Steps – key is to save after insert
• Start New Path – use instead of insert so steps can be complated in
parrallel rather than sequentially
http://fbs.anu.edu.au/__documents/tips_and_techniques/accountspayable-workflow/2014_tip_siw_workflow_actions.pdf
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Monitoring Workflow
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Monitoring Workflow
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Monitoring Workflow
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Monitoring Workflow
http://fbs.anu.edu.au/__documents/tips_and_techniques/accounts-payableworkflow/2014_tip_siw_monitoring_workflow.pdf
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Checking Of Defaulted Info
•
•
•
•
•
•
•
•
•
From Vendor
From OCR Process
Some review process by F&BS Staff
Vendor
Invoice No.
Invoice Date
Invoice Amount
GST Amount
Foreign Currency codes – Invoice and Payment
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Stats & Turn Around Times
• For 2014 – Average times per step
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Stats & Turn Around Times
Invoices Paid on-time (trade vendors only)
• Progressed from really bad to bad
• Key contributor is the 19.8 days from invoice date to
being scanned
• Encourage Vendors to send invoice to
invoice.workflow@anu.edu.au
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Stats & Turn Around Times
F&BS Turnaround Times
• Aim at < 3 Days – 2014 average 0.8
• Vendor Maintenance can slow down
process
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Duplicate Invoice Checking
• Yes it checks for duplicate invoice
• Where - Vendor ID, Invoice Number and
Invoice Amount is the same
• Getting occurrences where business areas
are sending the invoice in multiple times
• Encourage vendor to send the invoice to invoice.workflow@anu.edu.au
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Team Maintenance
• Responsibility of respective areas
• Contact you relevant College/Admin
Finance Manager
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Voucher Create
• Don’t forget to create the voucher once the
workflow process has completed
• We monitor and remind but it does slow
down the process
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Why is the voucher not paid
• Credits
• How to Check
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Staff on Leave
• Be Proactive or reassign
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Collaborative E-Mail
• Updated Tip & Technique –
http://fbs.anu.edu.au/__documents/tips_an
d_techniques/accounts-payableworkflow/2013_quickref_collaborativeappr
ovals.pdf
• There are constraints
• Restrict use
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ANU Financial Planning Model Project
Natasha Murphy, Project Manager SIG
29 May 2014
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Project purpose…..
• to improve efficiency and effectiveness of the current
systems for financial planning and budgeting :
• deliver increased data integrity levels;
• implementation of automated business processes;
• accessibility and transparency of the information to a
wide range of relevant staff; and
• flexibility for growth in the functionality of the business
model and technical support tool.
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Costing & Pricing Budget (CPB)
Tool Project
Maria Davern, Program Manager RSD
29 May 2014
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Background
• CPB Tool is being developed as an outcome of the
Grant Management Framework – Preparation and
Revision of Grant & Consultancy Budgets Working
Group Review (January 2013).
• Tool has been commissioned by the DVC (Research)
and Director, Research Services.
• Tool will support our researchers and professional
staff at application phase for externally funded
research.
• CPB Policy and Procedure (draft) is under
consideration by Executive that establish principles
and a formal cost recovery standard to improve
consistency, transparency and accountability.
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Objectives of Costing & Pricing Budget
Tool
1.To capture accurate costing and pricing budget
data for externally funded research in accord with
external and internal compliance requirements.
2.Enabling full cost estimation (direct + indirect),
and to improve cost recovery, for externally funded
research.
3.The storage and presentation of budgets for
approval and price presentation.
4.Enabling interoperability with relevant enterprise
systems.
5.Establishing efficient and effective workflow for
improved business process management.
6.Producing accurate reporting and analytics.
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Present State – Costing & Pricing Budgets
1
Driver
Implication
Compliance
ANU is a Registered
Research Agency under
29A of the Industry
Research & Development
Act 1986.
Under “Pricing Criteria” of this Act, it states that
Organisations that do not charge ‘ordinary commercial
terms’ (market rate, full cost recovery or full cost recovery
plus a normal profit margin) for these services are only
eligible if they are able to show that they are NOT using
government resources, such as appropriations and grants,
to subsidise their services.
Competitive Neutrality
ANU is not legally subject to ‘Competitive Neutrality’,
however it has agreed to observe the principles.
Cost Recovery
ANU supports the principles of ‘Cost Recovery’
requirements.
2
Sustainability
More research dollars in tight times.
3
Value
ANU provides external funding collaborators access to
world class research expertise and facilities. The cost of this
access is currently not reflected in the market pricing of
research and consultancies.
4
Transparency
Required by funders without disclosing commercial
information.
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Current State – Costing & Pricing Budgets(cont)
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Driver
Implication
Formal costing and pricing
principles for grants and
consultancies.
ANU has inconsistent approaches to costing and pricing
budgets including different approaches to indirect cost and
in-kind contributions in application phase.
There is no clear guidance or understanding of what
constitutes direct, indirect and in-kind costs, and the full
range of costs that should be budgeted for.
6
Audit implications of
inconsistent costing &
pricing practice at ANU
The recent internal audit (January 2013) demonstrates the
requirement for greater consistency across ANU.
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Efficiency and effectiveness
improvements
There is need for clear guidance, process and structure in
budgeting at application stage. In particular, the recovery of
full cost of externally funded research is poorly understood
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Compliance responsibility
ANU is responsible for managing legislative, regulatory, and
organisational compliance activities across research
activities. Without adequate compliance practice and
associated support systems and tools, ANU is at risk of
incurring reputation damage.
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Approach & Progress
• Agile approach to communication and collaboration
has been adopted to ensure that the project
progresses at a consistent pace through development
of the product with opportunities for refinement
following input from users.
• A prototype will be developed and socialised
• Project Plan and Governance arrangements in place
• High level requirements near completion.
• Seven requirements gathering workshops involving
seven colleges and a group of School Managers
completed across the University.
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Governance
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Timeline: CPB Tool Project
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Questions
Thank you!
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Accounting Standards Update
Rachelle Conry, Senior Accountant MR&B
29 May 2014
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Overview
• 2013 Reporting Year
– AASB 13 – Fair Value Measurement
– AASB 119 – Employee Benefits
• 2014 Reporting Year
– AASB 10 – Consolidated Financial Statements (2014)
– AASB 11 – Joint Arrangements (2014)
– AASB 12 – Disclosure of Interests in Other Entities (2014)
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AASB 13 – Fair Value Measurement
• Effective 1 January 2013 prospectively
• A single standard that
– defines fair value
– sets out a framework for measuring fair value
– requires disclosures about fair value measurement
only when another standard requires/permits an asset, liability or
an entity’s own equity instrument to be measure at fair value.
•
Scope exclusions
–
–
Share based payment transactions in the scope of IFRS 2
Leasing transactions in the scope of IAS 17
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AASB 13 – Prior FV Definition
Prior fair value definition
Weakness
The amount for which
an asset could be
exchanged or a liability
settled between
knowledgeable, willing
parties in an arms
length transaction
It did not specify whether an entity was buying
or selling the asset
It was unclear what settling meant as it did not
refer to the creditor
It was unclear about whether it was market
based
It did not state explicitly when the exchange or
settlement takes place
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AASB 13 – New FV Definition
New fair value definition
Improvement
The price that would
be received to sell an
asset or paid to
transfer a liability in an
orderly transaction
between market
participants at the
measurement date
It specifies that the entity is selling the asset
(exit price)
It refers to the transfer of a liability
It is not a forced or distressed sale
It is clear it is market based
It states explicitly when the sale of transfer
takes place
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AASB 13 – FV Measurement Model
• Takes into account characteristics of the asset or liability that
a market participant would take into account at
measurement date
• Assumes an orderly transaction between market participants
at the measurement date under current market conditions
• Assumes transaction taking place in the principle market,
otherwise the most advantageous market
• For non-financial asset takes into account its highest and best
use
• For liability reflects non-performance risk including own credit
risk
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AASB 13 – Fair Value Hierarchy
• Level 1: quoted prices in active markets
– Unadjusted
– Identical assets/liabilities
• Level 2: observable, but not quoted
– Based on publicly available information about
actual transactions
• Level 3: unobservable
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AASB 13 – Valuation Techniques
• Cost Approach
– Current replacement cost
• Market Approach
– Prices and other relevant information generated by
market transactions involving identical or comparable
items
• Income Approach
– Convert the future amounts into a single current
amount
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AASB 13 - Disclosures
• Disclosures previously only required for
Financial Instruments now required for all
items held at Fair Value
• For items held at level 2 & level 3
disclosure to include additional data about
the unobservable inputs
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AASB 13 - Example
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AASB 13 - Example
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AASB 119 Employee Benefits
• Changes to:
– Defined benefit plans
– Short-term employee benefits
– Termination benefits
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AASB 119 – Employee Benefits
• Short-term employee benefits – e.g.
annual leave
– Definition of a ‘short term employee benefit revised:
Employee benefits (other than termination benefits) that are
expected to be settled wholly before twelve months after the end of
the annual reporting period in which employees render the related
service
– Definition looks at when an employee benefit liability is expected
to be settled as opposed to when it is due to be settled.
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AASB 119 – Employee Benefits
• Requirement to assess annual leave obligations based on
historical trends of employee activity to determine whether
annual leave entitlements have historically been utilised in
full within 12 months of balance date
– If so will be a ‘short term liability’ measured at nominal value
– If annual leave entitlements carry forward for > 12 months from
balance date, entire annual leave obligation will still be measured as
a other long term benefits (similar to long service leave).
Current/non-current classification is unchanged only measurement is
impacted as an other long term employee benefit as the liability is
not expected to be settled wholly within the next reporting period.
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AASB 10-12 – Interests in Other Entities
• Interests in Other Entities
– AASB 10 – Consolidated Financial Statements
– AASB 11 – Joint Arrangements
– AASB 12 – Disclosure of Interests in Other Entities
• Changes to the definition of control, no longer based on
the 50% test
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Questions?
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Next Finance Forum is Wednesday
20th August.
Please register through Horus:
Course Code: FBS036
Course Session: 11
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