Manager Orientation
Budgeting & Forecasting
Today’s Agenda
New Budget Model Principles
Overview of budgeting and forecasting
Timelines
How the Funds work
Role of Financial Planning & Analysis
Overview of capital budgeting
Introduction to budgeting and forecasting models
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Objectives
1.
Introduction to the Budgeting Principles
2.
Gain an understanding of the budgeting and forecast process.
3.
Define the responsibilities of a budget owners in the budgeting and forecasting
process.
4.
Be aware of the budgeting and forecasting timelines.
5.
Introduction to the various budgeting and forecast models
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Budget Model Principles
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One university family
Alignment with vision and priorities
Mindfulness
Accountability
Transparency
Financial sustainability
Flexibility and entrepreneurialism
Incentives
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New Budget Model
Principles: Align human,
financial, and capital
resource allocations
decisions with Eyes High /
provincial results-based
budgeting
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Budgeting
A budget is the plan developed by an organization as its
benchmark to achieve its financial goals and objectives for
a period of time – generally for one year at a time.
Project budgets often span more than a single year.
Changes to a budget occur in the form of a forecast.
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Purpose of Budgeting
Provides a benchmark for evaluating financial performance against the goals
and objectives.
Helps an organization allocate financial resources.
A communication tool used to expresses financial goals and objectives of the
organization.
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What is Forecasting?
Forecasting is:
 the change in the future financial expectation from the original
budget usually as result of new information.
 a process of estimation to predict our financial results by using
current and historical information.
 performed monthly to incorporate changes in expectations such
as delayed hiring or purchase of materials.
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Purpose of Forecasting
A tool that provides information to help make prudent business
decisions and to understand the financial results and health of
an organization.
Helps to identify unexpected issues or new information so that
decisions for corrective action can be made.
Helps to identify potential opportunities and risks.
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Differences Between Budgeting and Forecasting
Budgeting is the financial plan that is produced each year and is
the guideline for which goals and objectives are evaluated.
Forecasting is the change of those original expectation within
the fiscal year.
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Responsibilities of the Budget Owner
Budget Owners are:
 individuals who are authorized to approve and incur expenses under a
Department ID (DeptID) or project.
 responsible for the effective and efficient allocation and use of financial
resources within their departments or project.
 responsible for preparing the budgets and forecasts for their respective
departments within the specified timelines.
 responsible for explaining any differences (variances) between their actual and
expected results with the help of their finance partner
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Types of Budget Owners
Department Budget Owners: are individuals who are responsible for a
functional operating area within a faculty/unit.
Project Budget Owners: are individuals who are responsible for
managing a project and may include Principal Investigators of a
research project and Project Managers of capital/non-capital projects.
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Types of Budgets
Annual Operating Budgets: are completed for all functional
faculty/units (including current year capital) as part of the annual
institutional plan and is submitted to the Minister of Alberta Enterprise
and Advanced Education (EAE) every March.
Project Budgets: are estimates of the costs of an entire project that
may span several years. The current year project (capital) budget is
included in the annual operating budget. Project budgets must be
completed and approved before the start of a project.
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Annual Budgeting Process
Federal/
Provincial Budgets
Board Approval
Fiscal Year Begins
Planning Process
Begins
Key Budget
Drivers
Expert Forum
March
April
May
June
July
August
February
January
December
November
October
September
Budget Review
Strategic
Initiatives
VP Budget
Roll-up
Budgets
Submitted
Budget
Principles /
Process
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Financial Planning Timelines
March 15th
Annual
Institutional Plan
and Budget
Submitted to EAE
January to March
Budget and Plans
Approved by the
Board of
Governors and
other committees
Ongoing
Financial
Management
(Forecasting and
Variance
Analysis)
November to
December
Vice Presidents
and Executive
Leadership
Reviews of Budget
and Plans
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July to October
Prepares Budget
Guidelines,
Updates Budget
Models, and
Issues Budget
Envelope
October
Faculty/Units
Complete and
Submit their
Budget and
Annual Plans.
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Forecast Timelines
Monthly - prepare monthly institutional forecasts that includes Yearto-Date (YTD) analysis of actual results compared with the budget. This
analysis is provided to Financial Reporting to be used in the Financial
Report Package provided to Executive Management, Audit Committee
and the Board of Governors.
Year-end - the analysis completed by the faculty/unit is used in
preparing the institutional Financial Statements and Annual Report.
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How the Fund Codes work
The way we were
Fund Name
Operating
Ancillary
Other Operating
Other Restricted
Research
Fund Codes
Fund 10, 35, Blank
Fund 15
Fund 12. 20, 30, 40, 45
Fund 50, 70
Fund 11, 60
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How the Fund Codes work
The reason for the change
Then Public Sector Accounting Standards (PSAS) came into
affect and we were required to look at our Fund groupings
in a slightly different way.
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How the Funds work
The way we are
Academic & Institutional (excluding FOM)

Fund 10, 35, Blank, 12. 20, 30, 40, 45
Facilities Operation & Maintenance (FOM)
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Same funds as above but restricted to certain department and account numbers
Ancillary
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Fund 15
Special Purpose & Trust
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Fund 50, 70
Research
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Fund 11, 60
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Role of Financial Planning and Analysis (FP&A)
Coordinate the budgeting and support forecast processes.
Support the preparation of the monthly, quarterly, and annual institutional
reports including financial analysis for the institutional financial statements
and internal financial reporting.
Maintain and update budgeting and forecasting models.
Support the Finance partners.
Support management in business analysis for general business support.
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Responsibilities of the Finance Partner,
Budget owner and FP&A
The Finance Partner is responsible for working with the budget owner
entering the data into the models, reviewing and validating financial
information for the faculty/unit they support.
Budget owners are responsible for reviewing and validating information
entered into the models for their DeptIDs with the support of the finance
partner.
FP&A is responsible for consolidating and verifying the information,
ensuring the accuracy of calculations, populating the models with relevant
data, and maintaining the models by coordinating required changes to the
models as required.
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What is Capital?
To identify, assess and plan for the capital needs of the
institution
To ensure the long-term goals and objectives goals of the
university are realized.
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What is the Capital used for?
 Books and collections
 Furniture, Computers, Buildings & Equipment
 A detailed account description listing can be located at the
Finance website.
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Models
The university uses Cognos Enterprise Planning (EP) which is a webbased application for all budget and forecasting models
Finance Partners are responsible for entering data into the models and
reviewing the data at the various levels which include department,
faculty/unit and at an overall institutional level for the areas they are
responsible for.
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Master Budget Model
The Master Budget Model allows for all of the institution’s
faculty/units to enter their budget into a single database.
The detailed Salary Budget Model roles into the Master Budget model
automatically. Budgets are by person and comprise the largest
component of our expenses in a year.
The model is capable of reporting financial information at department,
faculty/unit and at an institutional level.
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Variance and Forecast Model
The Variance and Forecast model allows all of the institution’s
faculty/units to enter their forecast and variance analysis into a single
database for ease of consolidation.
The Model is based on a rolling forward forecasting method that
combines YTD actual with estimates of the remaining periods for the
year to arrive at a forecast.
The model is capable of reporting financial information at department,
faculty/unit and an institutional level.
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Where to go for help
Your finance partner is always your first point of contact, however you can reach
anyone on the FP&A team in the following ways:
Our email address is:
fpa@ucalgary.ca
Our website is:
http://www.ucalgary.ca/finance/
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