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2007 Forecast

VIEWS: 43 PAGES: 15

									2009 April Forecast Guidelines

Contents:
Introduction & Responsibilities
Key dates/Timeline
General Information
         1. Income
         2. Salary expenditure
         3. Non Salary Expenditure

Phasing
          1.   Income
          2.   Salaries & On-costs
          3.   Capital Expenditure

Reporting
Review Expectations




1/15
Introduction
This is the first forecast for 2009 and provides an opportunity to highlight any variances to budget.


The April forecast will be a detailed exercise (with salary forecasting through PCP). The fo recast by College will be
reviewed and determined by the College Finance Manager and Pro-Vice Chancellor (PVC), with the appropriate
adjustments made if required to reflect the most likely outcome .
PRC has recognized the importance of this years April Forecast in the context of anticipated budgetary pressures in 2010,
and the need to forecast as realistically as possible.
Accordingly the Vice Chancellor (VC) has requested that all PVC‟s approach this April Forecast with a realistic mind-set.
Responsi bilities
PVC‟s and Directors own the forecast.
School Finance Managers should consult with their Head of Schools who must approve the School forecast for submission
to the College.


The key finance contacts for the development of forecasts are the College Finance Managers:
SET – Scott Roderick ex 52076
DSC – Eileen Luk
Business – Joe Armocida ex 55651
Non Academic Area‟s – Darren Bass ex 50655
Capital program, Property Services Group – Leanne Ensor


Additionally, members of the Budget & Financial Performance Management (BFPM) Team are also availab le to assist:
David Breese ex 50665
Laura McConnell ex 50618
Sam Bakas ex 50628
Wayne Benton ex 50604
Rebecca Laoang ex 50687


Forecast Linkages
        Strategic Planning
        Cash Forecast
        Budget planning
Methodol ogy
        Bottom up approach
        4 months actual/8 months forecast
        Determine likely 2009 financial outcome
        Results reported by School/Group
        Identify where co rrective action maybe required




2/15
   Ti melines
   The key forecast dates are:

2009 April Foreca st Timetable:

Date        Milestone                             Details                                    Responsibility
Early                                             Version ED (March) copied to Plan
April       PCP A vailable                        version EM                                 Grant O'Rourke
                                                  PFM's & FM's can begin to review/adjust
                                                  PCP                                        PFM's
  20-A pr   CGS Load & Revenue available          To be provided to PFM's & LMcC             Chris V. Zeyl
            HE INTON Load available (not
  21-A pr   revenue)                              To be provided to PFM's & LMcC             Chris V. Zeyl
  22-A pr   HE AFP Load available (not revenue)   To be provided to PFM's & LMcC             Chris V. Zeyl
                                                                                             Fred Brenann & C
  23-A pr   SOG Load & Revenue available          To be provided to PFM's & LMcC             V.Zeyl
            HE AFP & INTON Revenue
  24-A pr   distributed                           Provided to PFM's                          Laura McC
  28-A pr   New positions for April into PCP      Version ED up to dat e at end of April     Grant O'Rourke
  30-A pr   PCP Close                             PCP locked                                 David Breese
                                                  PCP uploaded, available in web reports &
 04-May     PCP upload to ledger/SAP              SAP                                        David Breese
 06-May     SAP/R3 ledger close for April         April Actuals copied to Version 99         Sam Bakas
                                                  College & School/area forec ast complete
 15-May     Forec ast final in SAP/R3.            in SAP                                     PFM's
                                                  Version 99 locked.                         Sam Bakas
 19-24th    Review of Forecast, PRC report
    May     preparation                                                                      BFPM team
 25-May     PRC agenda submission close                                                      Travis Walker
 Jun-03     PRC meet




   3/15
General Forecast information:
Some specific, but not exhaustive, information to assist in preparing the 2009 April forecast is as follows:


1. Income
The majority of income is derived fro m student enrolments and is determined by Stats & Reporting Unit (SRU) &
Financial Services (FS) based on student load projections & published prices.
The forecast information is distributed via a set of schedules prepared by SRU & FS and becomes available in mid-late
April. It is the responsibility of the College/School to ensure that the SAP forecast reflects the data in the schedules
provided.
Income falling outside these schedules is to be estimated by the College/Schools. These income sources include:


Commonwealth Grants Other: Please note that most of the Other Co mmonwealth Grants revenue is populated by central
finance, however some specific g rants are not. If you have any special grants please contact Rebecca Laoang to confirm
whether it has been handled centrally.
Key Contact: Rebecca Laoang


State Operating Grants (SOG): Is handled in a similar way to CGS and Co mmonwealth Grants Other. For State revenue
which falls outside of Director TA FE schedules, Colleges/Schools have responsibility fo r entering the forecast, with
confirmat ion fro m Fred Brenann to ensure no duplication occurs.
Key Contact: Fred Brenann


Other Fees & Charges such as:
Enrol ment Fees: Chris Van Zey l and Director TAFE determine enrolment fees for TAFE. The amount is direct ly related
to the number of students enrolled, and will be provided by SRU.


Industry Funded, Open Uni versity Australia, Distance Learning & Short Courses: The determination of Forecast
revenue for these income streams is the responsibility of the Colleges & Schools.
It is critical that at the point of preparing the forecast, all revenue is fully accrued or invoiced, so that at the year end close
off, all revenue relating to the year is taken into account.


Commerci al Income: It is important to determine what inco me RMIT is entitled to, and what will be raised by year end.
This requires knowledge about when RMIT is legally entitled to the revenue. E.g. work may be received at the end of the
2009 year, but the service will be provided in the fo llo wing year, and therefore must be recorded in the 2010 year.


Research Income : As per the new treat ment of research inco me and expenditure, research (externally funded, R030)
should return nil profit o r a profit equal to any capital expenditure.


RTS ,IGS & RIB G: Forecasts should reflect the updated allocations.
Key Contact: College Finance Managers and Justine Stojanovski (R&I)




4/15
Further Details on Research Income Classification:
Reci procal Definition: Deemed to have an economic and financial benefit, present and future to the funding body.
Normal CRC‟s and industry funded research are reciprocal.


Accounti ng Treatment: Must return nil p rofit o r a profit equal to any capital expenditure within the year. Research
revenue must be recorded in the forecast as the net value.
Net revenue must be recorded in the forecast as gross revenue allocated against the appropriate research cost element and
revenue deferred shown against the deferred income cost element.
E.g. Net research revenue = $150k, Expenditure $100k, Capital $50k


Recorded in the forecast as:
         434100 Research Contract industry       Cr    $200k
         434101 Deferred Income Cat 3 Aust Dr           $50k
         Total Revenue                          Cr $150k


         Expenditure                                          Dr $100k
         Operating Result (Profit)             Cr      $50k


         Capital                                              Dr   $50k
         Cash                                         Nil


Non Reci procal
Definiti on: No rmal government funding (Co mmon wealth, State or Local) grant money which needs to be acquitted and
returned. There is no economic or financial benefit.
Accounti ng Treatment: Any surplus (net of capital) will be accrued by the School Finance Manager as committed
expenditure in the default internal order within each sch ool. Note - this does not affect the individual research internal
order.
E.g.     Research IO - Project A
         Research Revenue                               Cr    $500k
         Expenditure                                          Dr $350k
         Operating Result (Profit)             Cr $150k


         Capital                                              Dr   $50k
         Cash                                 CR $100k


         School Default Internal Order Accrual
         558970 Accrued Research Cost             Dr $100k


Key Contact: College Finance Mangers or Wayne Benton




5/15
Table of Income Responsi bilities:


Income Responsibilities - 2009 April Forecast


                                                                                                                                Info Provider -
Cost Element Node                    Cost element Group                        Cost Element(s)           Info Provider - Load   Revenue           SAP entry*
Comonwealth Grants Scheme/HECS       Commonwealth Operating Grants             All C/E within            Chris V.Zeyl           Chris V.Zeyl      SCF
                                     HECS                                      All C/E within            Chris V.Zeyl           Chris V.Zeyl      SCF
Commonwealth Operating Grants - Other                                          All C/E within            n/a                    CFM               CFM

                                                                               All C/E within EXLUDING
                                                                               ANTA & SPECIFIC
State Government Grants                  State Operating Grant                 GRANTS                    Fred Brenann           Chris V.Zeyl      SFM
                                         State Operating Grant                 ANTA & SPECIFIC           n/a                    Fred Brenann      Fred Brenann
                                         State Operating Grant - Other         All C/E within            n/a                    Fred Brenann      Fred Brenann

Australian Fee Paying                    Full Fee Paying Postgraduate Fees     All C/E within            Chris V.Zeyl           Laura McC         SFM
                                         Full Fee Paying Undergraduate Fees    All C/E within            Chris V.Zeyl           Laura McC         SFM

Tuition Fees - Onshore Overseas                                                All C/E within            Chris V.Zeyl           Laura McC         SFM

Tuition Fees - Offshore Overseas                                               All C/E within            CFM                    CFM               CFM

Full Fee Paying Vet Award Fees                                                 All C/E within            Chris V.Zeyl           CFM               CFM

Other Student Fees & Charges             Enrolement Fees                       All C/E within            Fred Brenann           CFM               CFM
                                         Other Tuition Fees                    All C/E within            CFM                    CFM               CFM
                                         Industry Funded Places                All C/E within            CFM                    CFM               CFM
                                         Student Compulsory Non Acad           All C/E within            n/a                    CFM               CFM
                                         Charges                               All C/E within            n/a                    CFM               CFM

Other Income                             Research Grants Income                All C/E within            n/a                    CFM               CFM
                                         Donations & Bequests                  All C/E within            n/a                    CFM               CFM
                                         Other Income                          All C/E within            n/a                    CFM               CFM
                                         Investment Income                     All C/E within            n/a                    Sam Bakas         Sam Bakas
                                         Commercial Income                     All C/E within            n/a                    CFM               CFM


CFM's - College Finance Managers
SFM's - School Finance Managers
* School Finance Managers should confirm this with College Finance Managers.




6/15
2. Salary Expendi ture
Salaries will be forecast using PCP for the period 1st May to 31st Dec 2009. An appropriate position vacancy rate must be
applied wh ich reflects the likelihood of staff turnover.


Es tablishment: The current staffing establishment maintained by People & Cu lture forms the basis for the April Forecast.
It is only possible to create positions in the budget by substituting positions (closing existing positions to fund the new
positions), converting casual/agency budget into ongoing or fixed term positions and/or budgeting for new funded
positions (e.g. research funded positions).
The PVC/DVC (Academic)/VP (Resources) must approve these actions . In making changes to the University position
establishment reference should be made to the Position Admin istration Guidelines. New positions require the Position
Creat ion Form to be completed, which can be downloaded fro m the Financial Serv ices Web site:
http://www.rmit.edu.au/fs
A small nu mber of new positions may be funded fro m the Research Investment Fund or other approved strategic initiatives
– this will be determined with the indiv idual Colleges involved.


Personnel Cost Planning (PCP): PCP has access to, and draws upon, SAP HR data to calcu late salary budgets. Access to
PCP is restricted to staff that budget salaries. Reference should be made to PCP instructions available on the budget web
site on use of this system.
In a change fro m previous budgets, position maintenance, including addition of new positions will be undertaken by
College Finance Managers throughout the budget process.
At the conclusion of the budget, P&C will ensure that the University base establishment is updated in line with the PCP
budget for 2009.
Key contact for PCP: David Breese


PCP Pl an/ Version for the April Forecast: EM
This plan/ version will be available from 09 th April, & new positions approved i n April will be updated by People &
Culture on 28 th April.


Salary Increase Assumpti ons:
Academic (HE) & General Staff: EBA salary increases will be forecast centrally – therefo re no action is required by
School Finance Mangers or Portfolio Finance Managers.


TAFE Teaching Staff: EBA must be included in school/area forecasts by School Finance Managers. Users can use Model
Assumption 3 when running scenarios in PCP.


Academic promotions: Finance managers should check that any academic pro motions announced by the VC have been
factored/costed into the PCP positions.


Executi ve Bonuses: Finance Managers/ College Finance Managers should estimate these in the forecast.
Salary „creep‟ (e.g. due to incremental progression) does not need to be calculated as this is automatic calculated by PCP.




7/15
Vacancy Savings: Represents the difference between the Establishment and what actual positions are expected to be
filled. For examp le it may represent staff turnover or positions that can not be filled due to inability to find an appropria te
applicant.
A vacancy saving should be included in the Forecast. This should be calculated at a school level, based on historical
saving rates & any known position vacancies, and booked as credits in the “salary contra” cost elements.


Casual Salaries
Casual salaries may be budgeted at 2008 levels, indexed for EBA increases . The forecast for casual salaries should take
into consideration any increases in establishment that may reduce the need for this expen se.


A casual budget template is available for use to assist calculating the casual budget; this can be downloaded fro m the
Financial Services Web site.


Overti me & All owances
Salary costs such as overtime and allo wances may be budgeted at 2008 levels, indexed for EBA increases. The forecast
for overtime should take into consideration any increases in establishment that may reduce the need for this expense.


Long Service Leave
Staff taking LSL during the year must be charged against the position they occupy. The provision for revaluation of LSL
must not be budgeted by Colleges as this expense is taken up and managed centrally by FSG.


Annual Leave
Annual leave must be managed effectively to maintain both health and safety as well as budget efficiently. All leave wh ich
is incurred should be taken and this assumption must be reflected in the budget (i.e. no annual leave expense may be
budgeted for). Staff taking Annual Leave during the year must be charged against the position they occupy. The provision
for revaluation of annual leave must not be budgeted by Colleges as this expense is taken up and managed centrally by
FSG.


On-costs
The on-costs to be applied in 2009 are:



                                  On-cost                             % or A mount

                    Payroll Tax                                  4.95%

                    Work-cover                                     1.2%

                    Leave Loading Ceiling                     $ 1071.00




8/15
Note on Confi denti ality of staff information.
It should be noted that the information provided by PCP is confidential and must not be distributed. To ensure privacy of
staff informat ion the following must be adhered to:
        No separate records to be kept outside of SAP
        Access to data restricted to Finance Officer and Manager of each School/ Group
        Working papers must be locked in a secure location when not being used
        Working papers detailing salaries must be destroyed
        Log out of SAP - PCP when not in attendance.




9/15
3. Non Sal ary Expendi ture
Other Expenditure: It is important to know what expenses relate to the current reporting year. RMIT accounts are
prepared on an accrual basis, and therefore requires us to book expenses when RMIT is legally obligated to pay for an item
consumed in the year. E.g. An invoice for work co mpleted may not arrive until Jan 2010, however if the work was
undertaken in 2009, the cost must be accrued in the 2009 accounts.
In addition large strategic accounts such as Maternity Leave, VC‟s St rategic, Teaching & Learn ing Investment Fund etc
require full co mmit ment of funds over the year. These accounts are normally fu lly acquitted at the end of the year, so using
the current position to estimate the remainder of the year may not be relevant.
Depreciation:
Depreciat ion forecast will be done by B&FPG.


Capi tal Expenditure:
The forecast should also reflect an up-to-date view on capital expenditure fo r all equip ment purchases, the capital program
and IT projects.


Contact: Co llege Finance Managers



Note regardi ng TAFE Initi ati ves and Skilled Victorians Q profile:
The key contact for TAFE Q profile is Fred Brennan. Any queries regarding this should be directed to him.




10/15
Phasing
Introduction
Correct phasing of the budget is vital for measuring actual performance against budget as the year progresses. Income and
expenditure must therefore be accurately allocated to the months of the year to which they relate.


1. Phasing income
   Operating Grants – Commonwealth and State Government
   HEFA Research – APAs and HEFA Research – Int’l PG Awards (in UniWi de only)
   Commonwealth Accommodati on & Education Schol arships
The above income must be phased based on the number of calendar days in each month (use distribution key ZZ01).


   Specific Grants – Commonwealth and State Government
These capital grants must be phased in the month/s in which the related expenditure will occur and should be fully
acquitted in the year in wh ich funding is received (where th is is a condition of the grant). This income must therefore be
manually phased (use distribution key 0 and phase manually).


   Australian Competiti ve Grants, Other Public Sector Research Income, Industry and Other Research Income
    and Cooperati ve Research Centre Fundi ng
Research grant income should be manually phased to match the pattern of expenditure that will be incurred by the project
(use distribution key 0 and phase manually).


   RTS, IGS and RIB G
The above income must be based on the number of calendar days in each month. This will then better match the pattern of
receipt of this inco me fro m the government. Distribution key ZZ01 will apply this phasing .


   Fee discounts/wai vers
These should be phased in line with tuition fee inco me – see the next section. Use distribution key 0.


   Tuiti on fees – HE Australian Fee Paying
Income should be phased evenly within each semester and split between semesters after factoring in mid -year student

attrition & co mmencements. Inco me and load in a semester is comprised of:

-    Load/income of students returning from the previous semester (i.e. after attrition)
-    Load/income for students commencing in the semester
Where mid-year intakes or mid-year d rop offs are not significant, the phasing can be equal instalments across the year.


   Tuiti on fees – International Onshore HE & TAFE
Income should be phased evenly within each semester and split between semesters after factoring in mid -year student

attrition & co mmencements. Inco me and load in a semester is comprised of:

-    Load/income of students returning from the previous semester (ie after attrit ion)
-    Load/income for students commencing in the semester
Where mid-year intakes or mid-year d rop offs are not significant, the phasing can be equal instalments across the year.


11/15
    January           One twelfth of full year budget (reversing in Feb), written-down in the light of student acceptance
                      (demand) data if necessary

    February          Two twelfths of full year budget (reversing in March), written-down in the light of student
                      acceptance (demand) data if necessary

    March             2009 semester one income posted from the AMS to SAP, d ivided by two (ie for the first three
                      months of the year) (reversing in April)

    April             Semester one income posted fro m the AMS to SAP, divided by six and mu ltip lied by 4 (reversing
                      in May)

    May               Semester one income posted fro m the AMS to SAP, divided by six and mu ltip lied by 5 (reversing
                      in June)

    June              Final semester one inco me posted from the AMS to SAP (for the first 6 months of the year)


    July              Semester two inco me posted from the AMS to SAP, d ivided by six (reversing in August)


    August            Semester two inco me posted from the AMS to SAP div ided by six and mult iplied by two
                      (reversing in September)

    September         Semester two inco me posted from the AMS to SAP div ided by six and mult iplied by three
                      (reversing in October)

    October           Semester two inco me posted from the AMS to SAP div ided by six and mult iplied by four
                      (reversing in November)

    November          Semester two inco me posted from the AMS to SAP div ided by six and mult iplied by five
                      (reversing in December)

    December          Final semester two income posted from the AMS to SAP (ie for the last 6 months of the year)




NOTE: Actual Income posted by the AMS to SAP changes monthly, with the largest amounts posted in March and July.
Smaller adjustments to the income then occur in most months, due to changes in student enrolment.


      Tuiti on fees –Foundati on Studies (FS)
This should be phased according to the anticipated activity for 2009. Distribution key 0 allows for manual phasing of this
income.


      Full Fee Paying VET Award Fees
The phasing for this income should allocate it to the months in which the teaching occurs (i.e. in which the costs of
teaching are incurred). Inco me should not be phased based on the date of billing. Distribution key 0 allows for manual
phasing of this income.




12/15
   Industry funded student pl aces
Some of this inco me is invoiced via AMS, other through SAP invoicing by Schools. AMS generated income follows the
distribution pattern of tuition fee inco me described earlier, and any inco me invoiced directly by Schools should be phased
based on when the teaching activity/expenditure will occur. Either o f distribution keys 0 or 1 will apply.


   Enrol ment Fees (VET)
As students are enrolling throughout the year, the approach for this income is to phase it evenly across the year (i.e.
distribution key 1).


   All other income - teaching related (includes Other Tuiti on Fees)
As a rule, all other inco me should be phas ed to match the timing of the activity and related expenditure. Distribution key 0
will allo w this phasing. For example, donations which fund student scholarships should be phased according to the timing
of the scholarship expenditure.


    All other income
    - Non-teaching related (includes Charges; Product Sales; Fees for Service; Donations and Bequests; Investment
    Income; Sale of Property. Plant & Equip ment; Other income, Internal Inco me/Sales)
Income such as material fees can be phased and accounted for in the month in which receipt is expected, unless there is
related expenditure which it should be matched against.
As a rule, all other inco me (e.g. consulting, rental income) should be phased to match the timing of the activity and any
related expenditure. Apply distribution key 0.


2. Phasing salaries & on-costs


Salaries – fixed term and continuing (academic and general)
Salary allowances, work-cover, payroll tax, superannuation: The above expenditure is phased based on the number of
working days (including public holidays) in each month. There are 261 working days in 2009, and PCP uploads a phased
budget into SAP, so no manual phasing of the above is required.


Casuals – academic and general: Th is expenditure may be phased based on the number of pay periods in each month. In
2009 each month has two pay periods, except for Ju ly & December wh ich each have three. PCP will load casual budgets
but manual phasing or phasing via the appropriate distribution key is required.


Overti me, Travel per diem – general & academic, Honorariums: This expenditure appears in the accounts as it is paid
(i.e. SA P does not accrue it), so the phasing should reflect the pattern of actual payment i.e. the pay periods in wh ich
payment is made. The pattern of expenditure in prev ious years is a guide to the timing of these payments (i.e. when they
occur during the year) but remember that the number of pay periods in a month is different year to year. In 2009 the
months of July & December each have 3 pay periods.


3. Phasing non-salary expenditure
As a rule, non-salary expenditure should be phased based on usage or activity. For examp le PC leasing is paid quarterly
by the University, but the cost is incurred, and should therefore be phased, on a monthly basis.
If the amount budgeted is not large and therefore not subject to accrual, the cost may be phased based on when the
expenditure occurs.




13/15
Scholarship All owances
This expenditure generally appears in the accounts as it is paid to the students, and because it is paid via the payrol l system
the phasing should reflect the number o f pay periods in each of the months.
Note: there is separate treatment for RMIT contribution to support APA students as this has been fully expended in 2006,
therefore no budget should be provided for this item.


4. Phasing of capi tal expenditure
Capital expenditure should be phased according to when the asset will be received ( i.e. when the expenditure will appear in
the accounts).




14/15
Reporting
Version: In SAP/ R3 version 99 is used for the April Fo recast until the Forecast is approved. Once approved, the April
forecast is available in version 6.


Bi7: A Bi7 web report will be developed wh ich will aid the project ion of year end performance. More informat ion will be
provided when the report is available.


SAP R3: The fo llo wing SAP R3 reports may assist in the forecasting process:
SAP Transaction: KOC2
   Actual period Co mparison
   3 Year Actual Co mparison
   Plan Period Co mparison
   Management Report
   All Forecast reports
   All Planning Reports


PCP: The PCP Plan Version & Scenario is EM 01


Forecast Review Expectati ons


College Finance Managers should check the forecast result by activity to ensure that data entered aligns with the activity
categories.


School Finance Managers should undertake analysis of what they are providing in order to understand the “why‟s”.
For examp le, advising that salaries are increasing because more casuals are employed does not indicate the “Why”. The
reason “why” may be because of increases in student load and casuals being employed to undertake additional classes.
This level of in formation is required to be disclosed in the commentary.


Once analysis has been finalised, School Finance Managers are to submit a copy of their Management Report and an
accompanying half page co mmentary on the relevant Co llege‟s forecast.




15/15

								
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