MRAM
Monthly Research Administrators Meeting
MAY 14, 2015
UW TOWER AUDITORIUM
TOPIC
PRESENTER
CONTACT
MINUTES
FSSR Update
Jeanne Marie Isola
Director, Finance & Enterprise Business Services, UW IT
206 685-0903
jmisola@uw.edu
15
Compliance Corner
Ted Mordhorst
Assistant Dir. for Post Award Compliance, Research Accounting & Analysis
206 616-8678
tedm2@uw.edu
10
Reduced Responsibility Policy
Mike Anthony
Executive Director, Management Accounting & Analysis
206 616-1379
mda1213@uw.edu
10
Q&A
5
NEXT MRAM JUNE 11, 2015
UW TOWER AUDITORIUM
Finance Systems
Strategy and Readiness
2
Agenda
1.
2.
3.
4.
5.
6.
Modernization timelines
Governance
Guiding Principles
Strategy & Readiness Outcomes
Future State & Keys to Success
Next Step
Administrative Systems Modernization
FY 13
FY 14
FY 15
FY 16
FY 17
FY 18
FY 19
FY 20
HR/Payroll



Business process redesign
Replace legacy systems
Additional functionality
Finance






*
Procure to Pay
HR/P - finance intersections
Options analysis
Business process redesign
Replace legacy systems
Additional functionality
Student






MyPlan / Student self svc
Curriculum Management
Options Analysis
Business process redesign
Student - finance intersections
Replace legacy systems
Enterprise Info Mgmt



EDMS
Enterprise integration
EDW / BI build-out
Significant implementation effort
Incremental modernization
Project start up
(Ongoing maintenance and
production support not represented)
* Meeting biennium dates are critical to project success
Finance System Strategy and Readiness Timeline
Jul-Aug 2014
Sep-Oct 2014
Nov-Dec 2014
Jan-Feb 2015
Mar-Apr 2015
Finalize Gartner SOW
On board Staff Resources
Oct Kick off
Prep Work
Strategy, readiness and
process workshops
Fit/gap analysis
TCO
Final report and next steps
Organizational Change Management, Communications
HR/Payroll
Implementation:
Design Phase
Configure and Prototype (cont. through May 2015)
Governance Structure
•
•
•
•
Paul Jenny, Senior Vice President, Planning and Management
Ruth Mahan, Chief Business Officer, UW Medicine & VPMA UW
Kelli Trosvig, Vice President for UW-IT and CIO
V'Ella Warren, Senior Vice President, Finance and Facilities
ADVISORS TO
WORKING
GROUP
•
•
•
•
•
•
Ann Anderson, Associate Vice President and Controller
Susan Camber, Associate Vice President, Financial Management
Mary Fran Joseph, Associate Dean for Administration & Finance, SOM
Aaron Powell, Associate Vice President for Information Management
Gary Quarfoth, Associate Vice President, Planning and Management
Sarah Hall, Assistant Vice Provost, Office of Planning and Budgeting
PROJECT
DELIVERABLE
REVIEW TEAM
•
•
•
•
Ann Anderson, Associate Vice President and Controller
Bill Ferris, Chief Financial Officer, UW-IT
Sarah Hall, Assistant Vice Provost, Office of Planning and Budgeting
Barbara Wingerson, Executive Director, Finance and Administration, F2
PROJECT TEAM
•
•
•
•
Jeanne Marie Isola, Director, Finance, UW-IT
Kim Jaehne, Executive Assistant, UW-IT
Melissa Bravo, Project Manager, UW-IT
Jenn Dickey, Senior Project Lead, UW-IT
SPONSOR
WORKING GROUP
• Tim McAllister, Senior Analyst, UW-IT
• Lee Olson, Business Analyst
• Lisa Yeager, Project Advisor, UW-IT
Guiding Principles
Guiding Principle:
Enterprise System
All University of Washington units will utilize the new Finance ERP system which will deliver best
practice and standard ERP capabilities and work processes.
Guiding Principle: Business
Processes
The University of Washington will utilize functionality to achieve business process consistency across
the organization.
Guiding Principle: Sourcing
Guiding Principle:
Information/ Data
Guiding Principle: Risk
The University of Washington will adopt an approach of outsourcing the applications hosting,
management and support for its Finance ERP applications via third party Saas solution(s).
The University of Washington will standardize financial data definitions and values across the
institution for financial and consolidated reporting.
The University of Washington will apply a risk mitigation strategy that includes clearly defined
entry and exit criteria for each project phase to reduce risk.
7
Finance Systems
Strategy and Readiness
Goals and
Objectives
Engage Gartner Inc. as objective, vendor-neutral 3rd party
Preliminary, high level assessment of institutional readiness for the Finance
Modernization effort
Inform how and when to proceed with the Modernization effort.
Assess system solutions UW has chosen for Student and HR/P administrative
systems: Kuali and Workday
Leverage FSNA work, minimize campus impact
Develop business case that reflects fit/gap, total cost of ownership, and
roadmaps for each option
Gartner Processes included in scope
Record-to-Report
Processes
General Accounting/General Ledger
Treasury & Cash Management
Budgeting & Financial Planning
Asset Management
Project Accounting
Grants Management
Order-to-Cash
Processes
Internal Billing
Procure-toPay Processes
Purchasing & Payables
Technology
Solution Applications & Technology Architecture
Receivables & Cashiering
Expenses
Preliminary Outcomes
 UW financial systems are very fragmented and decentralized;
 Side systems, data re-entry and reconciliation creating huge overhead
 Focus of effort should be on Business Process Transformation; standardizing
and centralizing cross organizational processes
 Workday and Kuali are both viable options; costs of both options are
comparable
Future State
Flexible financial
reporting/analysis
tools;
Reduce side systems
and creative use of
project cost
accounting
Standard financial
policies, processes,
procedures; utilizing
ERP system
Centralized
leadership and
ongoing oversight to
govern/ administer
new system
Significant
organizational
changes
• staffing and skillsets,
• transparency of financial data
and
• changes in data & summary rules
impact leadership reports
Keys to Program Success
Management commitment to execute and realize the business case
Key sponsor and stakeholder buy-in and timely decision making throughout project
Institutional leadership support to make sure decisions “stick”
Appropriately respond to community resistance without derailing the program
Strong program management; unified project team; unified management structure
Obtain funding on a timely basis
Keys to Program Success
Contract w/vendors on a timely basis; SOWs and terms focus on shared outcomes
Engage a qualified systems integrator
Quickly recruit, hire and onboard on a timely basis
Schools collaborate on the solution
Effective coordination and collaboration with HR/Payroll project
Immediate Next Step
 Define funding strategy
Wrap Up/Questions
Appendices
1) Strategic and Business Drivers
2) Current State Findings
UW Strategic and Business Drivers
Address continued growth and complexity
Respond to increased competition
Transform due to increased market pressures
Mitigate operational risks
Achieve operational efficiencies
Provide foundation for transformation
Strengthen decision making capabilities
UW Finance System and Project Risks
Organizational
• Current system(s) and processes impede ability to address growth, competition, and transformation
• Organizational change “fatigue” as result of other initiatives (e.g., HR/Payroll)
• Overly complex governance and stakeholder buy-in processes may impede/derail progress
• Prerequisite policy changes to be negotiated and finalized in advance of implementation project
Financial
• No single “system of record”; fragmented systems/processes limit visibility into total financial picture
• Potential exposure due to numerous data extract/translation processes to support decision making and what-if analyses
• Financial data not available to make timely decisions, impacting UW’s ability to address performance issues or seize strategic
opportunities
• Potential constraints given decreasing and limited funding sources for system replacement
• Longer term pay-back period may limit support from senior executives
• Potential to not realize projected savings (e.g., retiring shadow systems, eliminating positions
Operational
• Current financial system support requires significant institutional and legacy system knowledge
• Lack of standard processes and modern financial system functionality results in risky workarounds and “heroic” efforts of a few to
support current system
• Extreme fragmentation of systems and processes across organization hinders ability to produce financial results accurately, reliably and
completely
• Resource availability and ability to support current and future financial system implementation effort due to competing priorities –
“performing while transforming”
Fiscal Compliance
Corner
Recent Happenings, etc.
MRAM May 2015
Ted Mordhorst
Director for Post Award Financial
Compliance
Research Accounting & Analysis
NSF Audits
University of Florida
Total findings:
$992,462
Univ of Wisconsin
Total Findings
$1,669,588
Audit News
NSF Data Analytics Audit
 UF
findings:

$867K related to 2 month salary limit

$48K related to travel costs
 $33K
lack of supporting documentation
 $27K
in unreasonable equipment
 $7K
meal & associated costs
NSF Data Analytics Audit
 Wisconsin
findings:

$1,276,668 of salary costs for senior personnel that exceeded NSF’s twomonth maximum for salary allocation

• $192,707 of unreasonably allocated leave accrual payouts

• $70,189 of inappropriately allocated equipment expenses
NSF Data Analytics Audit
 Wisconsin
findings:

• $56,965 of expenses incurred after the NSF award period had expired

• $35,592 of unreasonable consulting expenses

• $30,107 of unallowable relocation expenses

• $7,360 of unreasonable travel expenses
NSF Data Analytics Audit
 Auditor
Recommendations:

Strengthen the administrative and management controls and processes

Implement university-wide procedures to ensure that all departments
are monitoring the allocation of costs charged to NSF awards
NSF Data Analytics Audit
 Auditor
Recommendations:

Strengthen controls and processes over allocating expenses for
equipment and supplies to sponsored funding sources.

Require documentation of the methodology used to allocate expenses
to sponsored projects, as well as a justification for how the methodology
was determined.
NSF Data Analytics Audit
 Auditor
Recommendations:

Strengthen controls and processes over allocating expenses for
equipment and supplies to sponsored funding sources.

Require documentation of the methodology used to allocate expenses
to sponsored projects, as well as a justification for how the methodology
was determined.
NSF Data Analytics Audit
 Auditor
Recommendations:

Strengthen the administrative and management controls and processes
over charging expenses to federal grants near or after the grant’s
expiration date

Ensuring that all payments made to consultants are supported by an
academic services support agreement that is signed before the
services are provided.
NSF Data Analytics Audit
 Both
institutions disagreed with the findings related to the 2 month
salary limit.
 Auditors
did not remove the findings
NIH Audit
University of North Carolina
Total findings:
$352,843
Audit News
NIH UNC Audit
 Related
to Cost Transfers
Transfers occurred 10 months after the initial
transaction
Documentation did not provide sufficient information
to determine a direct benefit to the project
NIH UNC Audit
 Related
to Cost Transfers
Documentation did not provide an explanation for
the allocation method for partial transfer
Documentation did not explain why it took 10 months
for the transfer to be processed.
NIH UNC Audit
 Reason
for disallowances

Costs were not Reasonable

Costs were not treated consistently
NIH UNC Audit
 Reason
for disallowances

Department did not follow institutional policy

Lack of adequate review of expenditures
Final thought
 Audits
are increasingly looking at factors related to
internal controls
 Expense
documentation must demonstrate
reasonableness, necessary and allocability
 Expenses
during the last 90 days of the award are most
often questioned
Final thought
 Both
in the UG and in the audit there is an increased
emphasis on “necessary”, “essential” and “integral” to
define when a cost is allowable.
 It
behooves us to think in these terms when processing
transactions
TRAINING
 On
May 18 Training on Cost Transfers
 http://www.washington.edu/research/learning
 Classes are only 1 hour each (short! sweet!)
 Future trainings in development
 Direct Charging of Admin/Clerical salaries
 Principals
for cost Allocation
and other normally F&A costs
QUESTIONS?
Reduced Responsibility
Policy and Process
MRAM
May 14, 2015
Michael Anthony
Executive Director
Management Accounting & Analysis
What problems are we addressing?
The requirements of federal cost principles with respect to
faculty compensation necessitates the creation of a policy
and process that includes a ‘paper trail’ of the ‘full time’
salary base.
What problems are we addressing?
• Times when faculty lose a source of external funding (e.g.,
grant support) with the intent of returning to full salary when
alternate sources of funding are identified.
• Potential for federal agencies to disallow increases in
compensation perceived to be prompted solely by the receipt
of a grant
The Solution
• Establish initial full-time equivalent salary and document
the commensurate change in activities when it is reduced
due to loss of external funding
• Assumes no change in appointment.
• Documentation accomplished through the Reduced
Responsibilities process
RR Implementation Plan
Assembled a team
of faculty, staff,
and legal counsel
Developed,
reviewed and
approved new GIM
38 & FAQ document
Vetted with
academic and staff
groups across
campus
RR Implementation Plan
Created a
communication and
training plan
Communication to
faculty and staff
Roll-out spring &
summer 2015
Next Steps
• Roll out in three Phases
• First phase
– Soft rollout March – June 2014 (completed)
•
•
•
•
•
Participation of 3-4 units
Review new GIM 38
Review and provide feedback on FAQ’s
Participate in and provide feedback on training
Assist in identifying helpful tools
Next Steps
• Second phase
– Soft rollout - May/June 2015
• Participation of 6-8 units
• Review GIM 38, related FAQ’s and Training Materials
• Recruit 2-3 faculty in each unit to participate by going through the
process including completion of forms and providing feedback
Next Steps
• Third phase
– Full rollout June/July 2015
• Communicate to all campus units
• Conduct training/informational sessions for:
– Departmental Administrators
– Grant Managers
– Payroll Coordinators
Rolls & Responsibilities
• Faculty
– Meet with Chair if external (e.g., gift, grant) funding increases or
decreases
– Step 1: Follow sequencing of department/school bridge funding policy
and when it applies
– Step 2: Follow GIM 38 if department/school bridge funding policy does
not apply
– Update RR Status form when distributions increase/decrease
Rolls & Responsibilities
• Department/Division Administrator
– Facilitate RR process for faculty/chair/program director
– Serve as possible liaison between department and Dean’s Office
– Notify Chair/faculty if RR status seems imminent
– Ensure consistent application of policy for all faculty
– Coordinate with payroll coordinator
Rolls & Responsibilities
• Payroll Coordinator
– Update payroll distributions, including RRD based on the RRN form
– Notify Department Administrator if/when payroll distributions are less
than full appointment
– Review current payroll for unpaid %, WOS, LWP and notify Department
Administrator
Summary
• Policy intent is to protect faculty salaries in times when bridge
funding not available
• Campus training sessions in May/June (train the trainers)
• Roll out of new policy in July 2015
• Department/division administrators provide awareness and
guidance of policy to faculty
• Faculty responsible for initiating RR status