Charles Darwin University
2013 Budget Guidelines
Version 1 30th July 2012
Note: Includes copy of the University’s Operational Planning 2013 Template in Appendix 3.
2013 Budget Guidelines
1.0
Introduction
This document provides information about the process, important dates and support for the creation of the 2013
Budget.

The 2013 budget submissions will be informed by a range of planning documents and forecasts that
include; The University Strategic Plan, Faculty/Division Plans-that the 2013 Operational Planning
Template supports, and the Budget Objectives below.

The University Budget Workshops in February and July provided a forum for discussion, questions and
detailed feedback. Many issues raised have been addressed and incorporated into the 2013 budget
process.

The key feedback from the 2012 budget process is that the University requires budget holders to include
highly likely and anticipated revenues and costs on the restricted accounts for contracts that are work in
progress. It is also envisaged that management accountants should reconcile the internal revenues to the
internal costs. Budget holders felt that they should be given more time to enable them to digest and
analyse the data and for PVCs and executive directors to review the budget targets. Meetings in July and
August covered the key budget process changes with DVCs, PVCs and Executive Directors.

A smaller number of 2013 budget participants, when compared to 2012 budget participants were offered
the opportunity to have training in the University budget tool [Cognos]. This decision was reached as the
management accountants will be entering the salary information for each area. Ownership of the data will
be at the budget-holder level and electronic sign-off of information will ensure that data belongs to the
area. The ultimate sign-off for each area will be by DVC/PVC/Executive Director. There will still be highlevel targets set at a Faculty/Division level and these will be based on sustainability and the Five-Year
Plan. While preliminary data has been set within the budget system at the next level down
[School/Department] the ultimate allocation of resources within a Faculty/Division is the responsibility of
the DVC/PVC/Executive Director.

The budget process for 2013 will be a series of iterations, both within Faculties/Divisions and with the
submissions to the Budget Working Party. The Budget Working Party, assisting the Vice Chancellor, will
be reviewing the targets of all areas as the Operational Plans for areas are submitted. This will help to
ensure that the University has a sustainable future and that proposed activity is consistent with our
strategic direction.

The Pro Vice Chancellor Strategy and Planning is available to meet with Staff to discuss the Planning
Process and what the Budget Working Party is hoping to get from the Operational Planning template
documentation.

If there are any issues with the Budget data submission that cannot be resolved by your management
accountant, Finance Business Systems staff [elvis@cdu.edu.au or phone 8946 6039] or the overall
budget timetable please contact the Director of Finance, Mark Hewitson.

It needs to be reiterated that all budget targets are preliminary until approved by Council on December 7th
2012.
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Definitions: - Key technical terms used in discussing the University structure within the
planning/budgeting systems
Area – This refers to the individual areas for academic (schools) and academic support (branches) throughout the
university. Note there can be more than one area posting level for each school and branch.
Activity – This denotes the type of funding. Activities can be divided between recurrent (appropriation) and
restricted activity:
Recurrent activity is an activity that is funded on an ongoing basis.
Restricted activity is an activity that is funded from sources outside of recurrent funds.
Summary of Areas across CDU
Area
Vice Chancellor
Indigenous Leadership
Corporate Services
Strategy and Planning
Law, Education, Business and Arts
VET
Engineering, Health, Science and the Environment
School/Branch
Vice Chancellor Branch
CDU Foundation
Governance Branch
DSO
MACE Branch
University Advancement Branch
University Art Collection and Gallery Branch
Media Branch
Territory FM
Indigenous Leadership Branch
Indigenous Leadership Entities
Faculty ACIKE
Corporate Services Branch
Records Branch
IT Management and Support Branch
Library Services Branch
Human Resource Services Branch
Student Services Branch
CDU Amenities Branch
Strategy and Planning Branch
Marketing and Planning Branch
PVC LEBA
School of Creative Arts and Humanities
School of Academic Language and Learning
School of Education
School of Law
School of Business
Centre for School Leadership Learning and Dev
The Northern Institute
Northern Editions
Office of VET Business Improvements
PVC VET
School of Trades
School of Primary Industries
School of VET Health, Comm. and Child Services
School VET Business and Services Industries
VET Projects and Research
PVC EHSE
School of Psychological and Clinical Sciences
School of Health
Centre for Renewable Energy and Low Emission Tech
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School of Engineering and IT
School of Environment
Research and Post Graduate
Research Centre Health and Wellbeing
Centre for Remote Health
North Australia Centre for Oil and Gas
Facilities Management Branch
Financial Services Branch
Business Enterprises Operations
Procurement
3rd Party Arrangements
Executive Director FAS
Deputy Vice Chancellor Branch
PVC Academic
Organisational Development Branch
Research and Research Training Branch
International Branch
Research and Innovation Branch
NAILSMA Branch
Finance and Asset Services
Deputy Vice Chancellor
1.1
2013 Operational Plan Instructions
Please refer to the 2013 Operational Planning Template from the Pro Vice Chancellor-Strategy and Planning
Thursday 2nd August 2012. [See Appendix of this document3]
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1.2
Budget Objectives
The Budget will;

Be a subset of the University’s planning process.

Reflect the overall objectives and strategies identified in the University’s Strategic Plan with a strong
emphasis on ensuring that we are Leaders in Indigenous Education.

Ensure that the strategic component of expenditure is focused in the desired areas.

Provide incentives for quality teaching and learning.

Support a research culture.

Incentivise an enterprise culture.

Provide incentives for Domestic/and International EFTSL Revenue.

Be transparent i.e. the resource allocation process, the decisions made and data that it is based on
need to be clear.

Include feedback from University staff at all levels.

Be more devolved and have more input throughout the process from Schools/Departments. This will
ensure that decisions on individual account loading are made by those that best informed to make
the decisions and that salary models are “owned” by areas.

A more strategic process: The budget allocation process will make sure that Faculties/Divisions bids
for resources are evaluated against strategic priorities. This will help drive a performance-based
culture and one which is strategically aligned.

Encouraging goal-congruent behaviour: The congruence between the goals of the individual
Faculties/Divisions needs to be carefully managed.
1.3 Budget Operational Details

A series of Excel budget model templates have been prepared for all portfolio areas which provide targets
for Business-as-Usual Appropriation budgets at the summary area level which are consistent with the
University’s 5-year forecast. Indicative targets have also been provided at a school/department/ VET
Team level although the respective PVC/ED/DVC responsible for these areas has the autonomy to flex
these targets as long as the overall faculty/admin division/VET group target is achieved. The Excel budget
model templates have been adjusted for scheduled Enterprise Agreement increases, a modest non-salary
increase (1%) and any known one-off adjustments.

The above Excel budget model templates have been pre-populated with key financial and non-financial
data to allow a transparent view of available data within their University areas. These models will be
maintained by each area’s management accountant and will ensure a transparent modeling and reporting
tool for areas. These complement the Cognos budget system and can be easily updated to show the
current consolidated position for the entire Faculty/Division and also the entire University. All PVCs and
executive directors will sign off on their budgets before presentation to the Budget Working Party.
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
There will continue to be a Vice Chancellor’s Strategic Initiative Fund. Bids will be made for allocations
from this fund.

The setting of budget targets will be at the summary area level that they are responsible for establishing
the ultimate budget targets for their respective organisational units. In 2013 preliminary population of the
budget templates has occurred and preliminary targets to start the budget process will be communicated
to DVCs, PVCs and Executive Directors.

The final decision on the proposed University budget that goes to Council will be made by the Vice
Chancellor supported by the Budget Working Party.
1.3.1 Income Principles

All student-based income will be calculated on the basis of EFTSL/AHC targets by funding source. These
will all be recorded centrally i.e. not formally allocated to Faculties/Schools/Area. The University is in the
process of developing a Revenue Attribution Model this will involve the allocation of appropriation
revenues back to the individual areas. This will be formalized for the 2014 Budget and it will be run in
parallel with the 2013 budget process.

Capacity to request amendment to salary and other expenditure budgets in response to actual load
performance (either upwards or downwards) will be via the Operational Planning Templates and Cognos
Submissions. Funded VET activity should be provided with resources to deliver on commitments as
contracted.

Other amendments (e.g. as a consequence of additional expected income streams) will be approved only
on the provision of an acceptable documentation e.g. a business plan
1.3.2 Expenditure Principles

If an amended budget (either up or down) is required in response to forecast load performance in 2013
this needs to be noted in your 2013 Operational Planning Template and in your Cognos Budget
submission.[i.e. in the Non-Core Stream as it is requesting new expenditure - if it is approved it will flow
into the “Core Stream” budget – see budget flow chart for terminology]

Other amendments (e.g. as a consequence of additional expected income streams) will be reviewed by
the Budget Working Party and may be accepted upon sufficient evidence contained within your planning
documents submission.

Administrative reviews and forensic investigation of overheads will be conducted to identify possible
savings. This is a normal part of annual budget rounds and is an ongoing activity.
1.3.3 Carry-Forward Principles

The Vice Chancellor and Executive Director of Finance & Asset Services will determine in consultation
with DVCs / PVCs / EDs how much will be available for non-discretionary Carry-Forward to the following
year.
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
Carry-Forwards are only in Restricted Accounts. [It is noted that there are some concerns that they are
only for some restricted codes in some areas, e.g. 5000 series in Faculties not currently available for
Carry-Forwards]

The Carry-Forward will be recorded [outside of the budget system] and finally agreed in January however
the objective of the budget process is to capture the forecast revenue and intended expense for 2013 as
accurately as possible at the time of budgeting [i.e. Aug-Sept], so this will involve an estimate of
expenditure to the end of the current financial year that will therefore impact on calculated carry-forward.

No carry-forward will be budgeted, however budget-holders will still need to budget for what they
estimate their expenses and revenues will be in 2013. [and in many cases 2014 and 2015 also]

A variation will be actioned early in the new budget year to reflect the true carry-forward position and also
for new projects that are received after areas have completed their budget. The Restricted Accounts
operate on the ‘Funds Available’ principle and are therefore unable to overspend without access to a ‘Fin
Loan’, and Fin Loans are not advanced unless requested and verified.
1.4
Budget Structure
The 2013 Operational Budget comprises two major streams: [See previously distributed Flow Chart
repeated in Appendix 4]]


Core Stream: Maintenance of Current Business - New and Ongoing Activities.
Strategic Initiatives and Operational Initiatives.
Strategic Initiatives and Operational Initiatives will be evaluated and reviewed by the Budget Working
Party. All submissions from Faculties/Divisions will have been endorsed by DVCs, PVCs and Executive
Directors.
1.5
Strategic and Operational Initiatives
Summary information should be submitted in Cognos, as the core source of budget information, as well
as in your planning documents. The Cognos system also allows you to attach documents/ business plans
in any format that you require.
The summary Strategic/Operational Initiatives template in Appendix 1 is an additional tool that that you
may want to use to add any further information not already included in your Operational Planning
submissions or submitted via Cognos.
1.6
Maintenance of Current Business
Maintenance of Current Business [Core Stream] is the day-to-day task of servicing the existing and
planned 2013 activities. This includes growth, and decline in some areas. The University would generally
not expect Core Stream budgets to grow more than the agreed salary increases for salary items, agreed
staff increases for predicted growth in student load and a small indexation for non-salary items (1% in
2013). Changes in budget for academic units will be dependent on forecast student load profile, national
research productivity norms and external funds from business development.
2.0
The Budget Process
2.1
Operational Planning
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As indicated earlier please refer to the 2013 Operational Planning Template communicated by the Pro Vice
Chancellor-Strategy and Planning Thursday 2nd August 2012. [See Appendix 3 of this document]
2.1.1
Identification of Increases in Expense Budget
There are a range of reasons for requesting an increase in “Core Stream” budget load some of these are;
1. Student load increases
2. New contractual arrangements, University partnerships or entrepreneurial activities
3. Unforeseen costs in operational expenditure.
Evidence for these should be reflected in your Operational Planning Template submissions
2.1.2
Budget Tools / Assistance
The 2013 budget will be prepared using the Cognos budgeting tool which will be available for use from
July 30th 2012. Actuals for 2011 and budgets for 2012 are loaded and these may provide some guidance
when preparing costs for 2013. It is expected that the Management Accountants, Finance Business
Systems staff and the Finance Business Manager, Alice Springs [Jo Carlesso] will act as core support to
assist Heads of Academic Units and other staff, responsible for development of Operational Plans and the
budgets resulting from this process.
The Cognos budgeting tool is pre-populated with the HR salary data for review. All changes will be made
by the management accountant for the area.
Designated Cognos users e.g. management accountants/executive officers will be able to extract reports
using Cognos’ Business Intelligence functionality. These reports will enable analysis of budgets entered.
2.1.3
Additional practical help for loading budgets into Cognos
A number of users will be trained in the use of Cognos, for 2013 Budgeting [July 31st to Aug 3rd]. Even
though you may have been trained we want to ensure that you have further help as you load your
budgets. The training room has therefore been booked to provide additional 2013 Budget Support to all
users. This room is Orange 1.3.04 (Training Lab on level 3 in Orange 1) You can arrange a convenient
time [from the slots below] by contacting elvis@cdu.edu.au or phone 8946 6039 . Once in the lab you will
be able to log on to your own data and get assistance with loading your own budgets from experienced
Finance staff. Please book now as this will allow you to enter your budgets much more efficiently, as you
can get questions answered immediately and work on your own data in the Cognos model. If you don’t
book now and find that you are having issues then please us contact anytime to see if there is an
available slot.
Please note your management accountant will also be able to give you guidance.
The slots for the rest of this week [the week starting Tuesday 31st July] are;
Session 1 – Tuesday 31st July 2012 (9:00 am – 11:00 am)
Session 2 – Tuesday 31st July 2012 (1:00 pm – 3:00 pm)
Session 3 – Wednesday 1st August 2012 (9.00 am – 12.00 pm)
Session 4 – Wednesday 1st August 2012 (1:00 pm – 3:00 pm)
Session 5 – Thursday 2nd August 2012 (9:00 am – 11.00 am)
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Session 6 – Thursday 2nd August 2012 (1:00 pm – 3:00 pm)
Session 7 – Friday 3rd August 2012 (9:00 am – 11:00 am)
Session 8 – Friday 3rd August 2012 (1.00 pm – 3.00 pm)
2.1.4
Organisational Chart
Please include with your plan documentation a copy of your proposed 2013 organisation chart showing
hierarchy, current positions and any additional positions sought (e.g. in LEBA the School of Law and
Business has been split into two separate schools, the School of Business and the School of Law, in
EHSE RIEL will be known as the School of Environment and SELS will be known as the School of
Psychological and Clinical Sciences, these areas have been changed in Cognos). This is important as we
are mainly budgeting on current 2012 structures, and data will be transferred across for any further 2013
structural changes in December 2012/January 2013 once they are all finalised.
2.1.5
Timeline for Completion
The completed “Core Stream” budget and any required supporting plans and worksheets need to be
submitted to Finance and Asset Services [FAS] by the PVC/DVC and Executive Directors via the Cognos
budgeting tool by the close of business September 14th 2012. Please note that each area will have an
internal deadline that will be earlier than this date. All electronic copies of Operational Plans should be
sent to PVC Strategy & Planning and EDFAS for onward submission to the Budget Working Party. It is
important that these are centrally received at the appropriate time so that the process can be managed
efficiently and version control of the electronic Plans can be maintained.
Copies of your Operational Plans/Operational Planning Templates and funding requests will also be
passed by the Executive Director of FAS to the Director, Strategic Services and Governance.
If help or clarification on any aspect of the budget process is required please contact Mark Hewitson,
Director Finance or Executive Director FAS, Rob Brelsford-Smith. If help is required with the Operational
Planning templates please contact Scott Snyder, PVC Strategy and Planning.
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2.1.5
University Budget Timetable 2013
Date
Item
June 2012
2013 Load forecast review plus early revenue modelling.
Finalisation of mid-year 2012 budget review.
July 2012
Base Financial Data Check
 Alesco-Cognos Data Review
 Management accountants review of all positions
 Area review of all positions from Cognos Salary Models
Preliminary work on Area Operational Plans
 Staffing profile information provided
 Academic and Core Business areas provided with agreed
2013 projected moderated student load
 High level pre-budget checks of targets
 Executive Director of Finance and Asset Services/Director
of Finance and Management Accountants meetings with
senior staff to discuss budget methodology
July 16th 2012
University budget workshop chaired by the Vice Chancellor.
Financial sustainability of University reviewed in reference to; the
Five year-Plan, the University Strategic Plan, major Strategic
Initiatives and 2013 forecast load revenue/ other revenue.
High - level Capex Forecasts created
July 31st – Aug 3rd 2012
Cognos Training: Finance Business Systems Training Team will
send out details directly by registered participants – Management
Accountants coordinate the lists.
July 31st 2012
Budget Guidelines document [this will include key budget policy
issues] will be sent out/be available at training, and 2 x Cognos user
Guides will be available i.e. for both the Salary Model and the
Revenue and Expense Model. These will also be on the Finance
Website.
Initial Group targets from 5 year Plan given to PVCs, Executive
Directors and DVC areas.
PVCs, Executive Directors and DVC areas to book budget sessions
with direct reports and allocate resources within total initial
allocations.
Aug 20th – Aug 31st 2012
Capex submissions finalised via “Operational Planning Templates”
“Infrastructure” section.
Sept 14th 2012
Operational Plan Deadline with accompanying Budget
submission data –this includes both the “Core Stream” and
“Strategic Stream” Initiatives –see Budget Flow Chart model.
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Sept 17th –Sept 21st 2012
Finance/Budget Working Party review of all budget submissions and
quality checks on data including internal revenue and internal
expenditure. Further clarification may be required from budget
submitters during this period.
Sept 25th ,Oct 2nd and Oct 9th
2012
Meetings of the Vice Chancellor’s Budget Working Party.


This group will review Operational Plans [In the format of
the 2013 Operational Planning template] and the
accompanying Budget Submissions from areas. It will
review both the “Core Stream” i.e. the Business-as-Usual
budget submissions and also the “Strategic Stream” that
includes Strategic Initiative submissions and Operational
Initiative submissions
Request for further information may come from this group
Oct 12th 2012
Strategic and operational Initiatives finalised and communicated.
Oct 17th 2012
Submitted Budgets/Plans reviewed by VCAG.
Oct 22nd 2012
Finance and Infrastructure Development Committee: High level
update on Budget progress.
Oct 23rd 2012
Council: High level update on Budget progress
Oct 29th – Nov 9th 2012
Adjustment period for new information.
Nov 28th 2012
VCAG Final review of 2013 Budget
Dec 6th 2012
Finance and Infrastructure Development Committee: Final review of
proposed 2013 Budget
Dec 7th 2012
Council: Decision on 2013 Budget
Dec 10th – Dec 21st 2012
Budgeted Staffing Positions sent to HR Systems for Alesco Refresh
(assuming no significant structural changes)
Jan 2013
Budget loading into Oracle
Feb 2013
Preparation of 2013 Budget Books
Note 1: Additional budget reporting and transparency tools are the 2013 Budget Templates as discussed
with each PVC, Executive Director and DVC.
Note 2: The Excel Budget Model Templates gives the high level overview targets.
Note 3: All detailed budgeting will be completed in Cognos
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3.0
Income Budgets
Key load assumptions/forecast have been distributed
3.1
Student-based income
All student-based income will be derived on the basis of EFTSL / AHC targets by funding source. As
indicated earlier this revenue is recorded centrally and not allocated to faculties.
3.2
Research Income
3.2.1
RTS
The distribution RTS income will reflect the ongoing transition to a performance-based model as
follows:
2011 =
2012 =
2013 =
2014 =
2015 =
income at 20%, publications at 30% and 75% Performance, 25% HC x 1.5
income at 20%, publications at 30% and 100% Performance
income at 30%, publications at 20% and 100% Performance
income at 40%, publications at 10% and 100% Performance
income at 40%, publications at 10% and 100% Performance
3.2.2
Research Block Grant Income
3.2.3
Research Grant Income
Research areas need to specifically budget for project income and expenditure in Restricted Accounts.
3.3
Other Sources of Income
All Other Sources of Income are to be recorded in the Cognos Revenue and Expense Cube using the
appropriate natural account and sub-accounts. Please provide details as part of your Operational
Planning template submission.
4.0
Expenditure Budgets
4.1
Key Expenditure Assumptions
A series of projects have preceded the budget process. These have involved updating the Cognos 2013
HR model with all current staffing information i.e. during the revised 2012 budget process (that was
signed off by Council). The next step is that these models will be opened to management accountants
who are loading information on behalf of their budget areas. Designated staff can only see the information
in the area that they have been assigned. They may make changes through their management
accountant, in all cases, these changes need to be monitored and signed off by the budget “owner”. This
data is also centrally reconciled to detect anomalies. Each area has its own salary model in Cognos that
budget-holders will “own”. There is strong focus on understanding all the details of your staffing costs in
the 2013 budget. Each University VCAG member is responsible for the budget submission for their area.
4.2
Salary Budgets
These need to meet centrally set targets, at the DVC/PVC/Division level, and will of course ultimately be
dependent on the recommendations made by the Budget Working Party based on the contents of
Operational Plans. The ultimate decision on the quantum of the budget to be submitted to Council is the
Vice Chancellor.
Research Panel will allocate an agreed proportion of research block grant funding for the benefit
of strategic direction.
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4.3
Casual Staff
Casual staff needs are to be clearly identified within the funding allocations sought. Cognos will
automatically calculate applicable cost using the FTE and grading allocated. Each position number
against which such staff will be employed should be checked. Casual staff requests are to be included in
the reconciliation of 2013 proposed staffing load.
4.4
Restricted Accounts
Restricted Accounts should only be used to account for acquittable projects where it is necessary to
separately track the use of funds. Such funds may include specific Commonwealth funds (such as equity
support, indigenous support and disability support), research funds, scholarship funds and external
contracted funds.
Income and expenditure in relation to Restricted Accounts must be budgeted to ensure the University
meets Council-approved budget targets.
New Restricted Accounts will only be opened by FAS once the area responsible for the associated
income and expenditure has provided a budget for relevant income and expenditure for the current
financial year and, if a multi-year project, the life of the project. The Excel budget model templates for
each area allows a five year view for restricted revenue and expenditure, areas are encouraged to use
this tool in reporting future expenditure plans to the Budget Working Party.
Note: Management accountants will populate the reporting templates for each area.
4.5
Other Expenditure Items
You will be required to determine the timing of expenditure and reflect this in Cognos so that year-to-date
financial performance can be reported accurately during 2013. The phasing or monthly spread of budgets
should be carried out as you load your budget with help from your management accountant. This is
another priority in the 2013 budget process.
4.6
General Expenditure Items




4.7
Domestic/International Travel: To be identified in your plans.
Staff Development: Costs including travel and associated expenses to be identified. As a
rough guide, staff development budget should be based upon 1.5% of salaries.
Unique Costs: Those which are particular to the area or cover a unique function, excluding
overheads.
Consultants: Where applicable
Overhead Expenditure Items
Will continue to budget for these items as in previous years.[FAS manages this process]
4.8
Charge Backs
For those non-academic units that plan to back-charge other units for services they provide or costs they
incur, an outline of the guidelines behind such back-charging is required to be forwarded to the Executive
Director of Finance & Asset Services by Thursday September 14th 2012. This will allow quality checks on
the budgets submitted. (Business Enterprises are excluded from this requirement, for example Uniprint
and the Bookshop).
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5.0
Carry-Forwards
General principles covered earlier in section 1.3.3 above.
5.1
Restricted Account Surplus Balances
The following are categories of allowable Carry-Forwards:
 Restricted funds including specific Commonwealth funds (such as equity support, indigenous
support and disability support), research funds, scholarship funds and external contracted funds
 Funds allocated to specifically-approved multi-year Capital and Minor Works projects. All current year
allocations must be spent in the year of allocation
 Funds allocated to specifically-approved multi-year Major Equipment projects. All current year
allocations must be spent in the year of allocation
 Staff Awards
Non-faculty Divisions
As a general rule, no departmental operating surpluses will be carried forward. However, a proposal for a
specific strategic investment initiative may be submitted to the Budget Working Party for consideration as
part of an Operational Planning Template submission.
5.2
Recurrent Budget & Restricted Account Deficit Balances
All deficits are the responsibility of the operational unit in which they are incurred and will Carry-Forward
as a first charge against that operational unit’s future recurrent income / funding.
Operational unit managers will be responsible for rectifying their deficit position. Corrective action should
be implemented by senior management in faculties / admin divisions / VET teams that incur persistent
deficits (two or more consecutive deficits). This may involve a review of the operations of that unit and
result in a plan of action or structural change to rectify the situation, unless a previous management plan
or deficit budget has been agreed. Persistent deficits will also be discussed as part of the process of
performance reviews of Heads of Department.
5.3
Application of Carry-Forwards
Carry-Forwards shouldn’t be tagged to individuals nor used to supplement staff salaries.
Carry-Forward Balances will be reviewed on an annual basis by The Budget Working Party to ensure
there is sufficient justification for the continuation of the balance.
6.0
Capital Bids
6.1
Introduction
Bids for capital funds are to be made as part of the operational planning process. Capital bids should not
include the upkeep or repair or maintenance of site infrastructure.
To assist in aligning capital funding to the University’s strategic objectives it is important to employ a
rigorous process.
6.2
Definition of Capital
The key to deciding whether an asset is to be funded through capital expenditure or not is in part, based
on its value. The University’s capital expenditure is divided into two areas:
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

Capital equipment – property, plant or equipment (including assets making a standardised or
uniformed unit) with a value greater than $10K
New Works – major and minor, with a value greater than $10K
A capital asset, equipment or works, is to provide an ongoing benefit through its use and normally have a
useful life of three years or more.
Normally, repairs to capital assets are not capital expenditure they are operational expenditure.
6.3
Funding
Capital funding has constraints and only the highest priority items, determined through the capital bids
submitted through the operational Planning templates, will be funded.
6.4
Capital Expenditure Requests: These should be made via the Operational Planning 2013 Template
i.e. summarised in the “Infrastructure” section of the template
Guidance on the main components to this process are:




A detailed description of your requirement i.e. equipment or works and associated cost
Assessment of the viability for alternative options to source the capability e.g. loan or leasing
A risk assessment, identifying why the item will mitigate identified risks
Cost benefit analysis, demonstrating the cost value of funding and possible rates of return
See Appendix 2 and use this as an addendum to your Operational Planning Template submission.
6.5
Approval
All capital funding proposals must be supported by the respective PVC/ED or DVC as part of the
Operational Planning Templates submission process i.e. due for submission by Sept 14th 2012.
Note: August 31st 2012 in the timetable refers to the date being available at a summary level for
discussion purposes only.
All proposals will be prioritised and recommendations made by the Capital Development and Space
Management Committee before being reviewed by the Budget Working Party for final approval.
Proposals for capital funding can be made during the fiscal year but allocation of funding will generally
take place during the budget process. Urgent requests which demonstrate the highest priority will be
considered outside of this period.
Faculties, Schools and Divisions will be notified of approvals through the planning, reporting and budget
review process.
6.6
Execution
All approved capital expenditure will be managed by respective support areas within FAS and the status
reported to each Faculty, School or Division. These areas are:
 Capital equipment – Manager Procurement
 Minor new works (<$300K) – Director of Facilities Management
 Major new works – (>$300K) – Senior Manager Major Projects
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6.7
Asset Management Planning and Reporting
All proposal results will require reporting and promulgation. FAS will communicate the information. This
report will provide essential information into the status of proposals and subsequent projects and will
contain:








Proposal description
Approval status, indicating where in the process the proposal is
Who will be responsible for managing the delivery of the proposal
Timeline
KPIs or milestones
Completion status
Cost breakdown, including estimated and actual expenditure with variances
Useful notes
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Appendix 1 – Strategic/Operational Initiatives
THE PROPOSAL TITLE
Academic Unit: Business Unit/Service Area
Outline – What The Proposal Will Achieve
How does the Proposal align with the University’s Strategic Objectives
COST/BENEFIT JUSTIFICATION
SUMMARY
Estimated Total Costing
$`000
Salary and Salary Oncosts
*Base Salary
Salary On-costs (30%)
Sub Total
Non Salary Costs e.g.
Materials (Please Itemise)
Travel
Equipment
Etc (Please itemise)
Capital (Attach Capital Bids
form)
Sub Total
Estimated Total Income/Savings
$`000
Income (Itemise)
Sub Total
Savings (Itemise)
Sub Total
Total Costs
Total Income/Savings
NET BENEFIT
$
*Attach listing of staff showing name, number, salary, proportion (worksheet provided)
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DETAILED EXPENDITURE
2013
$’000
2014
$`000
Salary and Salary Oncosts
*Base Salary
Salary Oncosts (30%)
Sub Total
Non Salary Costs e.g.
Materials (Please Itemise)
Travel
Equipment
Etc (Please Itemise)
Capital
Sub Total
Total Costs
Income (Itemise)
Savings (Itemise)
Total Income/Savings
NET BENEFITS/(Loss)
MISCELLANEOUS
Location
Impact on other areas
Index to attachments and /or additional comments/explanation/business plan
Intangible Benefits
Proposer
DVC, PVC, Executive Director: Supported/Not Supported
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Comments
Vice Chancellor Approved/Not Approved
Comments
Office Use Only : Actioned by Management Accountant ----------- Date--------------
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Appendix 2
CAPITAL EXPENDITURE – RISK MANAGEMENT
1.
INTRODUCTION
The risk management approach adopted to assist in evaluating the priority of the item is taken from the Australian
and New Zealand Standard 4360:2004. This approach will identify the benefits and levels of any associated risk
and is achieved through the following simple formula:
2.
RISK = LIKELIHOOD x CONSEQUENCE (R=LxC)
PURPOSE
This method will assist in prioritising a capital proposal through risk identification and treatments, and provide the
framework in which to contextualise the elements surrounding the risk assessment, providing a sound basis for
rigorous decision-making and planning.
3.
RISK CRITERIA
The risk assessment is to be established against certain criteria which have been determined to have a detrimental
effect on the University if not addressed. These criteria must be put into the correct context when conducting the
risk analysis against the capital proposal. The criteria are as follows:



4.
Safety – Public and employee safety if the proposed action is not completed
Asset protection – University-owned assets vulnerability to destruction, damage or security if the
proposed action is not completed; and
Strategic outcome failure – University outcomes fail if the proposed action is not completed.
SCALE TABLES
In conducting the risk analysis on the capital item, the following tables of scales need to be understood to help put
the criteria into context and be applied to the risk matrix:
Consequence Scales – Table 4.1
Descriptor
Definitions
Asset Protection
Safety
Outcome Failure
Failed to meet any part of a strategic
outcome with extensive adverse
consequences
Catastrophic
Loss of life
Complete destruction or loss of
asset with no ability to recover
Severe
Very serious injuries
possibly leading to loss
of life, requiring
immediate
hospitalisation
Partial destruction or loss of
asset with little or no ability to
recover
Failed to meet all important parts of a
strategic outcome with some adverse
consequences
Serious injuries
requiring hospitalisation
Significant damage or loss of
asset but requires additional
funding to repair or replace
Met some of the major objectives but
failed to meet all of the strategic
outcome with some adverse
consequences
Some damage or potential loss
but easily repaired or replaced
Met all the important objectives but
failed to meet the whole strategic
outcome with some consequences
Slight damage or vandalism with
no loss, requiring minor repairs
Met all the important and some of the
minor objectives of the strategic
outcome with minor consequences
Major
Moderate
Minor
Injuries requiring
immediate first aid
attention but may not
require hospitalisation
Minor injuries requiring
first aid attention but
not hospitalisation
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Negligible
Minor ailments not
requiring first aid
attention
Insignificant damage with no
loss, not requiring immediate
minor repairs
Met the whole outcome with some
minor consequences
Likelihood Scale – Table 4.2
Descriptor
Almost Certain
Likely
Possible
Unlikely
Improbable
5.
Definition
It will occur
Can be expected to occur
Might occur but not expected
It is probable it will not occur
Theoretically possible but will not occur
RISK LEVEL
As part of this risk assessment process the level of risk has to be identified to allow risk treatment plans to be
developed, demonstrating strategies to mitigate the risks and a priority set for the capital expenditure based on the
strategy.
To assist in identifying the level of risk, the risk formula is used, which is R=LxC therefore, the following key and
matrix are to be utilised to determine the risk level:
Risk Key – Table 4.1
H
M
L
High Risk
Medium Risk
Low Risk
Risk Matrix – Table 4.2
Likelihood
Almost Certain
Likely
Possible
Unlikely
Improbable
6.
Negligibl
e
M
M
L
L
L
Minor
M
M
L
L
L
Consequences
Moderate
Major
H
M
M
L
L
H
H
H
M
L
Severe
Catastrophic
H
H
H
M
M
H
H
H
H
M
RISK DOCUMENTATION
All risks identified are to be entered onto the proposal form and a mitigation strategy is to be detailed for all
risks identified as medium (amber) or high (red).
7.
RISK REVIEW
When risks have been identified and a mitigation strategy detailed a review of the risk assessment is to be
completed. This will ensure that any suggested strategy will mitigate the identified risks.
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Capital Bid Proposal Form -To Attach to 2013 Operational Planning Template
Submission
(To be completed for all capital projects which are submitted for inclusion in the budget for the next fiscal year)
Location:
Budget Year:
Academic Unit / Division:
Estimated project completion date:
Contact name:
Project start date:
Designation of asset:
Budget level ($):
Project reference number (assigned by FAS):
STRATEGIC ALIGNMENT(Note Applicable Goal/s)
PROJECT REASON (Tick the most relevant)
Replace existing asset
Capital enhancement
Regulatory
New investment
Undefined
DETAILED PROJECT DESCRIPTION
ALTERNATIVES
YES
Have other methods/means been investigated to achieve outcome:
NO
Brief explanation:
RISK ASSESSMENT (This section documents the risks and mitigation plans to form
the risk register, insert
new rows as required)
HIGH
If capital funding is not allocated what is the overall risk level (tick one)
Identified risk:
Against which risk criteria (tick appropriate
box)
Strategic pillars
Safety
Asset protection
Mitigation strategy:
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LOW
Risk
Level
LOW
MEDIUM
HIGH
If used reviewed risk level is
HIGH
MEDIUM
LOW
COST BENEFIT ANALYSIS
Initial capital expenditure ($)
Continuing operational costs (list assumptions and
associated cost based on repairs and maintenance)
Year 1 ($)
Year 2 ($)
Year 3 ($)
Year 4 ($)
Year 5 ($)
(Guidance available from FAS)
Efficiency dividend (list how savings are achieve and
assumed savings)
Year 1 ($)
Year 2 ($)
Year 3 ($)
Year 4 ($)
Year 5 ($)
Cost benefit year on year
Year 1 ($)
Year 2 ($)
Year 3 ($)
Year 4 ($)
Year 5 ($)
(operating costs – efficiency dividend)
Total cost benefit – ((capex + continuing operational costs) –Efficiency dividends) ($)
VALUE ADD
Provide brief explanation of how this capital expenditure will add value to the strategic pillar(s) as indicated at the top of
this form:
Applicant Signature
Dean/Director/Head of School Signature
Date:
Date:
CAPITAL DEVELOPMENT AND SPACE COMMITTEE RECOMMENDATION
Recommended
Priority
YES
NO
LOW – Not considered for capital expenditure funding this fiscal year
MEDIUM – To be considered as a high priority in the next fiscal year
HIGH – To be funded this fiscal year
Committee comments:
Chairperson Signature
Date:
Budget Working Party Approval
APPROVED / NOT APPROVED
BWP Comments:
VC Signature
Date:
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Appendix 3
Attachment dated Thursday 2nd August 2012 from PVC Strategy and Planning Final
version for Budget Input
Note: Feedback from the workshop requested an Infrastructure Section, this has been added in.
CHARLES DARWIN UNIVERSITY
OPERATIONAL PLANNING 2013 TEMPLATE
<<AREA>>
<<Version>>
<<Date>>
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Guidance on completing the template
The primary focus of Operational Planning is to set targets for the year ahead, the achievement
of which will contribute to the University meeting its aspirations as outlined in the Strategic
Plan. Managers across the University are accountable for performance against the targets and
objectives established in Operational Planning process. The priorities, risks and initiatives
identified in Operational Planning will inform the overall planning of the University.
The Operational Planning process involves a number of fundamental components:




Agreement on planned inputs, outputs and targets, including (where applicable)
teaching load, research outputs, changes to the workforce, etc.
Provision of a budget to achieve these outputs.
Agreement on a range of supporting activities, including quality assurance measures,
partnership activities, plans to expand participation, etc.
Provision by areas of advice and commentary relevant to institution-level decision
making, including identification of key risks.
This Operation Planning template, along with supporting documents relating to teaching load
allocation and budget, provides a framework for undertaking the above discussion.
For 2013, some particular areas to note:





In the latter part of 2013, the University anticipates negotiating a three-year Compact
Agreement with the Commonwealth. Developments that will need to be reflected in
the Compact (for example, Higher Education teaching initiatives, infrastructure
proposals, activities that target an expansion of access and participation) should be
highlighted in this plan.
The University has been considering how to better align VET provision with
employment opportunities in the NT, such as around opportunities associated with the
Waterfront development and major resource projects. VET areas are asked to reflect
their thoughts and plans for the coming three years in this context.
Course development continues to be a priority. Areas should highlight plans for course
development or refurbishment, and in particular plans that involve Designated
Commonwealth load (sub-Bachelor and Post Graduate Coursework).
The University has spent some considerable effort in the second half of 2011 and in
2013 reconsidering the staff profile. This activity will continue for some time. ALL
areas should highlight their plans and/or concerns in relation to staffing, including staff
numbers, the distribution of levels, teaching and research focus, initiatives in response
to the My Voice survey results, and any process or technology improvements that would
improve staff effectiveness. Staff benchmarking data will be provided to areas as the
budget process continues.
Planning in relation to restricted account expenditure has been problematic for the
University, often because it is difficult to predict the success of grant applications and
tenders. The University needs areas to include details of all speculative income that
will form part of the restricted account expenditure if successful.
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Please note that areas will often not provide information in each section. It is important that all
areas provide information in the sections relating to:




Overview
People
A Leader in Indigenous Education
Finance and Infrastructure
All Higher Education areas must provide information relating to Teaching and Research; all
Vocational Education and Training areas must provide information relating to Teaching; and
all central administration areas must provide information in relation to Support and Service
Provision. Beyond this, areas should use their best judgement as to what areas are relevant.
What is important is that the final document provides a picture of all major activities, targets,
aspirations and challenges facing an area. These may be new or continuing activities, but
please provide only those considered major and important for senior management and the rest
of the University to know about.
At the conclusion of the Operational Planning process, each of the agreed area plans will be
compiled and made available to the University community. For this to be practical, each area
plan will have to be concise. It is recommended that no more than 1-2 pages be devoted to
each section answered in the template, and that the main points be easily accessible by the
broader CDU community.
Overview
Highest Priorities
Provide a dot point list of the 3-5 highest priority activities for your area over the course of
2013. Provide enough detail to convey exactly the planned achievement, what success will
look like, what resources will be directed to the activity by the area and what will be the
necessary contribution by the University. Link the priorities back to University priorities as
articulated in the Strategic Plan. If it is possible to cost the activities, please do so.
Key Planning Issues
Provide a dot point list of the 3-5 key issues and risks facing your area. These may be related
to the priorities above, or related to other major aspects of operational planning, such as
achieving load or working within the allocated budget.
Greatest Opportunities for Improving Performance with Strategic
University Support
Give a brief description of activities where a strategic change would be a significant difference
to the outputs of your area. This could, for example, where additional resources would lead to
a significant expansion in teaching or research activity, where a change in University practice
would lead to significant efficiency gains, or where the establishment of new infrastructure or
technology would facilitate improved access.
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Broad Approach to Revenue Growth and/or Expenditure Reduction
In a few dot points, provide a summary of the most important revenue growth and/or
expenditure reduction strategies for 2011, including some estimate (quantified) of what is
expected to be achieved.
People
The University workforce is actively being reshaping to put the organisation into a sustainable
position from which to grow and expand. In this section, areas should provide a brief but
explicit description of actions planned to help achieve this vision. Mechanisms that can be
used include, but are not limited to, shifting positions from one area to another, not filling
vacancies, changing roles, making use of the Teaching Focussed roles, VET/HE integration,
combining work functions, initiatives in response to results from the My Voice survey and the
use of systems and technology to make processes more efficient. Areas will be provided with
some benchmarking data over the course of the budget process. Please provide costing data
were relevant.
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Teaching
Teaching Load
Formally accept the accompanying teaching load targets, or note requested changes.
Key Issues and Risks
Outline any significant issues or risks that may impede achievement of teaching load targets.
Priorities
Provide a brief dot point list of priority activities to be undertaken to support achieving the
target teaching load. Please include comments on activities related to the Structural
Adjustment Fund project and any initiatives that aim to improve student retention.
Strategic Developments
Provide strategic developments the area will undertake in support of the University achieving
Strategic Plan goals. Please reference to the introductory comments at the start of the
template for areas of particular interest. Also, describe any course development envisaged
over the next three years, and make mention if they are in partnership with another
organisation (eg, Flinders University or an external specialist training provider).
Strategic Plan
Reference
Activity
Requires
Additional
Investment?
Quality Assurance Mechanisms, Processes and Challenges
Provide a succinct commentary relating to your area’s activities, needs, plans and risks as
relating to quality assurance.
Approach to Expanding Access and Participation
Provide a succinct commentary relating to your area’s activities, needs, plans and risks as
relating to expanding participation in tertiary education by target groups, including LSES
students.
Research
Research Outputs
1. Formally accept the accompanying HDR load targets, or note requested changes.
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2. Summarise expected research outputs.
Key Issues and Risks
Outline any significant issues or risks that may impede achievement of research outputs as
described above.
Priorities
Provide a brief dot point list of priority activities to be undertaken to support achieving the
agreed research outputs.
Strategic Developments
Provide strategic developments the area will undertake in support of the University achieving
Strategic Plan goals.
Strategic Plan
Reference
Activity
Requires
Additional
Investment?
Approach to Expanding and/or Enhancing Research Outputs and
Outcomes
Provide a succinct commentary relating to how your area will pursue an expansion and/or
enhancement of research outputs and outcomes. Quantify the expected level of improvement,
for example in terms of HDR student load, publication points, grants and IP generation.
A Leader in Indigenous Education
Highest Priorities
Provide a dot point list of the 3-5 highest priority activities planned to assist the University in
achieving its strategic aspirations. Please provide costing information where possible /
relevant.
Key Issues and Risks
Outline any significant issues or risks that may impede achievement of Indigenous Education
goals.
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Priorities
Provide a brief dot point list of priority activities to be undertaken to support achieving
Indigenous Education goals.
Strategic Developments
Provide strategic developments the area will undertake in support of the University achieving
Strategic Plan goals.
Strategic Plan
Reference
Activity
Requires
Additional
Investment?
Quality and Sustainability - Support and Service Provision
Highest Priorities
Provide a dot point list of the 3-5 highest priority activities planned to assist the University in
achieving its strategic aspirations.
Key Planning Issues
Provide a dot point list of the 3-5 key issues and risks facing your area in relation to achieving
planned outcomes.
Pursuing the Centre-Led Model
Provide a dot point list of the 3-5 highest priority activities planned to assist the University in
achieving its aspirations in having a centre-led model as the CDU approach to service
provision. The dot point list should provide information on the development and roll-out of
Service Level Agreements.
Systems
Provide a dot-point summary of the main IT / Business Systems issues and risks, both for those
systems that your area is the business owner and those systems where you are a main user.
Quality and Sustainability - Finance and Infrastructure
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Budget
Formally accept the budget working sheets.
Key Planning Issues
Provide a dot point list of the 3-5 key issues and risks facing your area in relation to achieving
budget outcomes.
Restricted Accounts
Formally accept the budget working sheets. In the table below, provide a brief description of
major projects and grants (>$50k) being undertaken or expected. NOTE: all restricted
accounts where a carry-forward is anticipated must be reflected in the table below.
PLEASE NOTE: It will be useful for the University to capture as many expected activities as
possible, regardless of how speculative. Please provide as much detail as possible, including a
note of how speculative the project may be.
Project /
Grant
Name
Brief Description
Expected or
Known
Dates
Level of
current
budget (by
year)
Carryforward
for 2013
Infrastructure (See Appendix 2 for a Capex Bid Proposal Form and Background
Information)
Provide an overview of infrastructure needs.
Infrastructure
Item
Activity It Supports
How Critical?
Appendix 4
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Level of
current budget
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