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Office of Student Affairs Service Center Implementation & Standardized Fiscal Processes

Office of Student Affairs Service Center Implementation & Standardized Fiscal Processes. Office of Student Affairs Service Center & Standardized Fiscal Processes Introduction. Presenter:. Dan Allen, MBA, CFE, CISA Student Affairs Controller and Director of Fiscal Support Services

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Office of Student Affairs Service Center Implementation & Standardized Fiscal Processes

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  1. Office of Student Affairs Service Center Implementation & Standardized Fiscal Processes

  2. Office of Student Affairs Service Center & Standardized Fiscal Processes Introduction Presenter: Dan Allen, MBA, CFE, CISA Student Affairs Controller and Director of Fiscal Support Services PH: 688-3318 E-mail: allen.31@osu.edu 1-01

  3. Office of Student Affairs Service Center & Standardized Fiscal Processes Introduction THANKS!!! There have been MANY involved, directly or indirectly, with the analysis, planning, reviews, and participation in the various processes to streamline and strengthen our fiscal processes. We appreciate all of your assistance and your continued effort to make these implementations a success! • Student Affairs Leadership Group • Student Affairs Fiscal Council members • Student Affairs Buyers Council members • Student Affairs Human Resources members • Student Affairs Information Technology members • Student Affairs team members involved with designing, recommending, and presenting standardized fiscal processes and procedures • Everyone involved with the KPMG analysis and recommendations • University Controller’s Office • Internal Audit • Office of Human Resources • OSU Medical Center Controller’s Office • Business & Finance leadership • and many more . . . 1-02

  4. Office of Student Affairs Service Center & Standardized Fiscal Processes Introduction Overview Objectives This overview is intended to provide the framework for our implementation of a new fiscal support structure (service center model) and our standardized fiscal processes. In this overview, we will . . . • Discuss why we are making changes to our fiscal support structure and fiscal processes. WHY • Discuss how we created our service center model structure and how it is designed to operate. HOW • Discuss our implementation actions for the service center model so that we are able to achieve the maximum benefits and to minimize negative impact on our staff and operations. WHAT This is all a work in progress and your input is greatly appreciated!! Please call me or e-mail me any thoughts you may have for structure and process improvements. Dan Allen – 688-3318 or allen.31@osu.edu 1-03

  5. Office of Student Affairs Service Center & Standardized Fiscal Processes Topics Topic 1: Introduction Topic 2: Strategic Goals Topic 3: Background on Fiscal Structure and Fiscal Processes - KPMG Findings/Recommendations - Student Affairs Fiscal Process Workgroups - OSU Medical Center model Topic 4: University Fiscal Structure and Process Analysis Topic 5: Guiding Principles and Service Center Structure Topic 6: Implementation Concepts Topic 7: Internal Controls Overview Topic 8: Risk Assessments and Control Activities Overview Topic 9: Information Technology Support Overview Topic 10: Monitoring and Communications Overview Topic 11: Next Steps & Conclusion WHY HOW WHAT 1-04

  6. Office of Student Affairs Service Center & Standardized Fiscal Processes Topic 2: Strategic Goals WHY Strategic Goals 2-00

  7. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes Topic Objectives • Discuss how fiscal structure and standardized fiscal processes relates to: • The University’s Strategic Goals • Our Student Affairs Strategic Goals 3-01

  8. Office of Student Affairs Service Center & Standardized Fiscal Processes Strategic Goals Strategic Goals: • Streamlining and Strengthening Core Processes is a key University focus • Implementing Best Business Practices to meet Internal Control requirements, to Simplify Systems, and to Conserve Organizational Resources is a primary goal of Student Affairs • To implement these two strategic goals requires • Fiscal organizational restructuring and • Standardization of fiscal processing 2-02

  9. Office of Student Affairs Service Center & Standardized Fiscal Processes Strategic Goals From President Gee’s Six Strategic Goals for the University Simplify university systems and structures through an uncompromising focus on performance, transparency and accountability. The university must examine and modify its administrative practices, review its budget system, share resources and streamline services. From report to the Board of Trustees Audit Committee (January 31, 2008) “Action Plan for Streamlining and Strengthening Core Processes” presented by Bill Shkurti and Joe Alutto Key to success is the implementation of the Service Center Concept. Objective is the implementation of Service Centers throughout the University within 18 months. Student Affairs was recognized for our leadership in this initiative. From VP of Student Affairs Goals for 2007-08 Best Business Practices: Organizational restructuring to meet internal control requirements, simplify systems, and conserve organizational resources. 2-03

  10. Office of Student Affairs Service Center & Standardized Fiscal Processes Strategic Goals • To implement the Student Affairs strategic goals of • Put Students First: Expand Learning Environments • Forge One University • Focus on Staff and Organizational Success • Community Engagement, and • Simplify Systems • Requires efficient fiscal support services (structure and processes) to • Maximize resources to support all of our strategic goals. • Improve efficiency over time by • Standardizing processes, • Eliminating duplicate processes and internal controls (bureaucracy), • Better aligning staff skills with functions, • Improving accuracy results in reduced re-work. • Improve information for decision making, and • Improve operations by • Improving transaction quality and service level, and • Reducing risks and increasing compliance. 2-04

  11. Office of Student Affairs Service Center & Standardized Fiscal Processes Strategic Goals What fiscal processes will be involved with the redesign of the fiscal structure and standardized fiscal processes? • Procurement/Payables Processes • General Requisition/Purchase Order Process • Blanket Purchase Order Process • Petty Cash Process • Procurement Card Process • 100W Process • Travel Requests and Travel Reimbursements • Other Reimbursements, Refunds, and Non-PO Payments • Accounts Payable (Student Affairs Satellite Accounts Payable) • Accounts Payable (University Central Accounts Payable) • Accounting Processes • Accounts Receivable (Initial Billing – Revenue Recognition) • Accounts Receivable (Collection Process) • Cash Receipts/Deposits • Journal Entries • General Ledger Reconciliations • Payroll Processing (in the future) 2-05

  12. Office of Student Affairs Service Center & Standardized Fiscal Processes Topic 3: Background on Fiscal Structure and Fiscal Processes WHY Background on Fiscal Structure and Fiscal Processes 3-00

  13. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Fiscal Processes Topic Objectives • Discuss the historical background and changes to the fiscal support structure and processes • Discuss the KPMG consultant’s findings and recommendations • Discuss activities of our Student Affairs Fiscal Process Workgroups • Discuss OSU Medical Center fiscal support structure 3-01

  14. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes Background on Fiscal Structures and Fiscal Processes Fiscal Processing Pendulum 1 2 3 Centralized Processing (prior to 2000) Decentralized Processing (2000 to 2008) Service Centers (2008+) 3-02

  15. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes • Historical Background: • Fiscal support organizational structure and processes have been significantly affected by historical changes in the University’s operating environment. • Prior to the PeopleSoft implementation in 1999/2000 (centralized): • Departmental processing was done via paper and signature approvals. • Large centralized University departments reviewed and approved paper forms, and then entered data into a mainframe computer for processing. • Departmental staff had no access to the computer. • Separation of duties and appropriate transaction review outside the department chain of command occurred as a natural growth of the process. • Following the PeopleSoft implementation in 1999/2000 (decentralized): • The opinion of the time was to decentralize to speed up processing. • Many control features built into PeopleSoft had to be bypassed or modified to achieve the decentralization desired. • Individual departments greatly improved efficiency but significantly decreased control. 3-03

  16. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes • Historical Background (continued): • 2002-2004: • Following Enron and other corporate scandals, the federal Sarbanes-Oxley Act of 2002, and a major scandal at the University of Akron, State of Ohio Auditor, Betty Montgomery asked auditors to look closely at control policies. • The University’s Board of Trustees established an Audit Committee to review internal and external audit findings, and monitor the University’s response. • External audits identified shortcomings in the University’s decentralized organizational structure, leading to numerous recommendations about the need for compensating controls. • In an attempt to create standardized processes with built-in controls, the University responded in a process-by-process manner, with new policies on Pcards, cell phones, Internet connectivity, travel, purchasing, payroll, and others. • The University kicked-off a process requiring Deans and Vice Presidents to certify compliance with a set of 16 standard control points. 3-04

  17. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes • Historical Background (continued): • 2005-2008: • University accountability for controls, which in pre-PeopleSoft days rested heavily on centralized processing units, was delegated to the Dean/VP levels. All Dean, VP, and senior fiscal officer job descriptions were changed to include standard language about responsibility for assuring internal controls. • External audits have continued to include major findings about the lack of controls in the University’s decentralized operating environment. Many of these comments are repeated from previous years. • Student Affairs has been subject to an increasing number of internal audits. Since 2004, there have been 9 audits and 87 findings of control deficiencies, with 47 related to cash handling, 9 to reconciliations, 8 to expenditure policies, 5 to inventory control, 5 to Pcards, and 13 to miscellaneous items. • Student Affairs reviewed internal controls during 2005 and 2006, resulting in the completion of an assessment in 2006 identifying both strengths and weaknesses. 3-05

  18. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes • Historical Background (continued): • 2005-2008: • In December 2006, Student Affairs hired a consulting firm (KPMG) to provide further analysis and to provide recommendations for balancing internal controls with operational efficiencies. • In Spring 2007, the Audit Committee of the Board of Trustees hired PricewaterhouseCoopers for University-wide recommendations for improving internal controls and processing efficiencies. (discussed in Topic 4) 3-06

  19. Office of Student Affairs Service Center & Standardized Fiscal Processes Background on Fiscal Structure and Processes Student Affairs Fiscal Processing Analysis and Direction Service Center Fiscal Processing Concept The following slides provide an overview of the fiscal processing analysis performed by Student Affairs, starting with the KPMG analysis that began in December 2006. 3-07

  20. Office of Student Affairs Service Center & Standardized Fiscal Processes KPMG Findings/Recommendations • KPMG Findings/Recommendations for Student Affairs – to balance internal controls with operational efficiencies: • KPMG Findings (Overview): • Because of inconsistent fiscal processes, 72 different flowcharts were required to document 8 fiscal processes for 31 Student Affairs operations. No process was consistent among Student Affairs units. • Over 400 Student Affairs full and part time staff are involved in the fiscal processes, resulting in approximately 118 staff time FTE (total annual staff time not number of staff) devoted to business and accounting processes. Given the 118 staff time FTE, the estimated cost of fiscal processing for Student Affairs is over $7.7M in annual salary, benefits, and other costs. • “. . . the lack of standard processes and a compliance function to ensure the processes are followed and adequate controls are in place, hinders the ability of Student Affairs to meet the 16 control points.” 3-08

  21. Office of Student Affairs Service Center & Standardized Fiscal Processes KPMG Findings/Recommendations • KPMG Recommendations (Fiscal Organizational Structure): • The KPMG consulting report mirrors University external and Student Affairs internal audits, citing weaknesses in a decentralized structure creating an enhanced need for compensating controls. They recommended: • Creating a “shared service” or “service center” model, which would change the reporting relationship of business staff currently assigned to operational units. • KPMG’s recommendation is based on addressing the basic flaw with the decentralized structure. In a decentralized structure, the business manager (serving as the unit “controller”) reports to the director of the department. The director has the authority to overrule the business manager, creating risks that have to be mitigated. • The “shared service” or “service center” model changes the accountability from multiple individual directors (as is now) to one VP-designated controller. The controller can use the supervisory authority provided in the organizational structure to assure that controls are implemented and sustained. 3-09

  22. Office of Student Affairs Service Center & Standardized Fiscal Processes KPMG Findings/Recommendations • KPMG Recommendations (Standardize Fiscal Processes): • KPMG determined that no one process was performed consistently across all Student Affairs units and 72 flowcharts were created to document the “as-is” processes. • KPMG pointed out the significant risks in the wide variability, and provided the following considerations: • The greater the differences in business processes, the higher the risks. • Higher risks leads to more controls. • The more controls that are used, the greater the opportunity for bureaucracy, inefficiency, and conflict. • Processes should be consistent across an organization. • Controls should be built into the processes. • Flexibility must be ensured to allow for effective operations in unique units. • Flexibility requires compensating controls (see #3). Therefore, exceptions to standard processes must be limited. 3-10

  23. Office of Student Affairs Service Center & Standardized Fiscal Processes KPMG Findings/Recommendations KPMG Summary Recommendations: • KPMG identified that no one recommendation can stand alone and that Student Affairs should: • Restructure fiscal organization to a more centralized structure • Redesign and standardize the fiscal processes • Maximize use of systems technologies • Implement centralized controls monitoring processes, and • Establish a centralized compliance and training group • KPMG identified that if ALL of the above recommendations are implemented, Student Affairs should • Achieve significant efficiency improvements in fiscal processing, • Achieve more streamlined and efficient processes and internal controls, and • Potentially return approximately $4M in annual benefits back to Student Affairs to be used for implementing our strategic initiatives. 3-11

  24. Office of Student Affairs Service Center & Standardized Fiscal Processes Fiscal Process Workgroups • Following the KPMG study . . . • Student Affairs Fiscal Process Workgroups (June-September 2007): • Student Affairs created four process workgroups (accounting, procurement, • inventory, and payroll) to recommend • Standardized fiscal processes, • Process-related internal controls, • Monitoring techniques, • Measurements (of success), • IT support requirements, and • Process fiscal support structure. • The workgroup members were identified by the AVPs to represent their operations. • The workgroups began by reviewing the KPMG-recommended processes and fiscal support structures and then provided their recommendations to a Student Affairs Steering Committee that was composed of the VP, AVPs, and central directors. • The recommended processes formed the foundation for our streamlined fiscal processes. 3-12

  25. Office of Student Affairs Service Center & Standardized Fiscal Processes Refined Fiscal Structure Refined Fiscal Structure (July-December 2007): In general, when addressing the process fiscal support structures, the workgroups recommended: • Using a “hybrid” of the KPMG models (consensus was not achieved on fiscal structures). • Continuing to process the transactions and approvals at the unit-level (as much as possible) for larger units. • Shifting processing locations to Student Affairs central fiscal support services for smaller units that do not have adequate segregation of duties. • Controls monitoring and fiscal process training should be provided by Student Affairs central fiscal support services. Because consensus was not achieved, other fiscal models at OSU were researched. One fiscal structure that approximates the KPMG recommended models is the OSU Medical Center (OSUMC) model. The OSUMC service center model has been in successful operation for approximately 10 years. 3-13

  26. Office of Student Affairs Service Center & Standardized Fiscal Processes Refined Fiscal Structure OSUMC Model Overview: • A “hybrid” of the KPMG Shared Services/Service Center models. • OSUMC has three centralized business support services: Finance, HR, and Purchasing. Each reports to a different administrator. The Finance group is also referred to as the Controller’s Office. • Each of their eight business units has a Director and a Business Manager (referred to as the “CFO”). The Business Manager reports to the unit Director and has a dotted-line relationship to the Controller. In general, the Business Manager has unit-specific staff that perform analysis for labor, productivity, supplies, work directly with patients, draft budgets, and etc. as well as assist the Director in general business matters and decisions. • Additionally, to provide accounting and other fiscal support, most of the eight hospital business units have three embedded (on-site) fiscal support staff members that report to the Controller and provide support to the hospital business units. The three embedded staff generally consist of a lead accountant, a senior accountant, and an accountant. • The embedded staff assist the hospital business unit with all accounting activities, help coordinate payments with the hospital’s centralized Accounts Payable (part of the Controller’s Office), help coordinate purchases, help with inventory controls and management, cash handling, and additional financial reporting needs for the unit. These staff report directly to the OSUMC Controller’s Office and have a dotted line to the unit CFO/Business Manager. 3-14

  27. Office of Student Affairs Service Center & Standardized Fiscal Processes Refined Fiscal Structure OSUMC Model Overview: OSUMC Central Administration HR Finance Purchasing Controller’s Office • Accounting • Financial Reporting • Accounts Payable OSUMC has 8 Business Units Embedded team reports to the Controller’s Office (hard line relationship) Business Unit Unit CFO works with the Controller’s Office (dotted line relationship) Administrator Embedded Fiscal Support Embedded team works with the Business Unit (dotted line relationship) Opns Mgr Opns Mgr CFO Bus. Mgr Lead Accountant Unit Support Unit Support Unit Support Senior Accountant Accountant 3-15

  28. Office of Student Affairs Service Center & Standardized Fiscal Processes Refined Fiscal Structure OSUMC Model Overview (continued): • Segregation of duties is maintained by embedded accounting staff reviewing and entering transactions for the unit and reporting to the OSUMC Controller’s Office. The embedded accounting staff are expected to ensure compliance with policies/procedures and internal controls. • Informal service level agreements exist between the Controller’s Office and the supported hospital units. The hospital units pay for the embedded fiscal support staff and participate in their performance reviews. • The 26-member central Controller’s Office performs the accounts payable processing, higher-level accounting, controls monitoring, reconciliations, training, cost accounting, budget coordination, system support requirements, back-fills unit accounting staff, ensure pay equity for the unit accounting staff, and coordination with the University. • The embedded accounting staff are highly focused on customer service (to hospital business units) and on identifying ways to improve the financial position of the hospital by analyzing costs, identifying potential new revenue sources, and providing net income enhancement ideas/recommendations to the unit CFO/Business Manager. • The structure helps ensure fiscal process specialization, use of standardized fiscal processes, and implementation of effective and efficient internal controls. 3-16

  29. Office of Student Affairs Service Center & Standardized Fiscal Processes Topic 4: University Fiscal Structure and Process Analysis WHY University Fiscal Structure and Process Analysis 4-00

  30. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis Topic Objectives • Discuss PricewaterhouseCoopers consultant’s findings and recommendations to the Audit Committee of the Board of Trustees) • Discuss benefits of Service Center concept (as presented to the Audit Committee) • Discuss timeline for the University’s implementation of the Service Center concept 4-01

  31. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis The following slides provide an overview of University-related fiscal processing analysis performed by PricewaterhouseCoopers for the Audit Committee of the Board of Trustees, starting in Spring, 2007. Fiscal Processing Analysis and Direction Service Center Fiscal Processing Concept University The PricewaterhouseCoopers analysis was augmented by other external reviews, such as from the external audit findings and recommendations. 4-02

  32. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis In a report to the Audit Committee of the University’s Board of Trustees (BOT) for the January 31st, 2008 meeting, recommendations/findings from external reviews, identified the need to focus on: • Higher degree of standardization and consistency • Formalized policies and procedures • Assessment and documentation of key controls • Improved training • Increased central monitoring and oversight with defined linkage to the Enterprise Risk Management Program The report identified the following: The “key to success” was the implementation of the “Service Center Concept” The Service Center Concept is a business structure in which selected support functions such as fiscal and human resources processing are directed to a consolidated unit staffed by highly trained, skilled experts who specialize in those functions/processes. The objective of the Service Center Concept is to create a structure that provides effective and efficient core business services by allowing employees and organizations to focus on what they do best. 4-03

  33. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis Benefits of Service Center Concept (from the report to the Audit Committee): Improved Operations: • Eliminate non value-added processes • Narrow scope of support staff roles and responsibilities • Improve transaction quality and service level • Reduce risk and increased compliance Improved Information: • Greater standardization of processes • Improved data quality for analysis • Greater flexibility and capacity for change • Improved capability for monitoring and oversight Improved Efficiency Over Time: • Eliminate duplicate processes within organizations • Eliminate redundant staffing • Better align staff skills with functions • Better alignment of transactions and processing methods • Improved accuracy results in reduced re-work 4-04

  34. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis College/VP 1 College/VP 1 College VP 3 College/VP 3 Service Center Dept G Dept G Service Center Central Purchasing Central Purchasing Dept H Dept H Dept I Dept I Dept J Dept J Dept D Dept A Dept A Dept D Service Center Dept K Dept K Dept B Dept E Dept E Dept B Dept C Dept C Dept F Dept F College/VP 2 College/VP 2 Service Center Concept (from the report to the Audit Committee): Current State Future State 4-05

  35. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis Service Center Concept (from the report to the Audit Committee): • Bill Shkurti and Joe Alutto will provide leadership with implementing service centers for their • operations (Business & Finance and Office of Academic Affairs). • Office of Student Affairs was recognized for our leadership in analysis and moving toward • service center model/concept. • Goal for the University is to have Service Centers in place within 18 months (by June 2009). Incentives and rewards are being considered by the University for Units with proven track records and centralized operations (service centers). 4-06

  36. Office of Student Affairs Service Center & Standardized Fiscal Processes University Fiscal Structure and Process Analysis Student Affairs Fiscal Processing Analysis and Direction Service Center Fiscal Processing Concept University Student Affairs and the University arrived at the same conclusions at essentially the same time, but followed different paths. 4-07

  37. Office of Student Affairs Service Center & Standardized Fiscal Processes Topic 5: Guiding Principles and Service Center Structure HOW Guiding Principles and Service Center Structure 5-00

  38. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure Topic Objectives • Discuss guiding principles used for designing the service center concept for Student Affairs • Discuss the Unit’s fiscal support structure and responsibilities • Discuss the embedded Student Affairs fiscal support services (SAFSS) structure and responsibilities • Discuss the Student Affairs central fiscal support services structure and responsibilities • Discuss considerations for determining the staffing requirements for the embedded SAFSS teams • Discuss other important benefits of the service center implementation 5-01

  39. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure There are NO standard “Service Center” models. Each service center must be tailored to the unique circumstances for the University operation. • How did Student Affairs develop its Service Center model? • By considering various findings, recommendations, and lessons learned, such as by: • Considering external recommendations and best practices (KPMG, external audit, and PricewaterhouseCoopers) • Researching best practices within OSU (OSUMC model) • Considering recommendations from the Student Affairs workgroups • Considering audit findings and recommendations from Internal Audit • From these lessons learned, Guiding Principles emerged to form the basis for the Service Center model. 5-02

  40. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure From lessons learned, the following are the guiding principles for the Student Affairs service center model and for standardized fiscal processes: • The Office of Student Affairs will comply with University policies, procedures, and laws. Compliance is everyone’s responsibility. • Fiscal processes will be standardized across the operations to maximize efficiencies, to balance internal controls and cost, to provide flexibility for implementing policy and procedure changes, and to facilitate business continuity initiatives. • Fiscal processing costs, including staffing, IT support, training, and etc. are paid (directly or indirectly) by the operations for which the fiscal activities are provided. • Fiscal processing centers (service centers) with embedded fiscal support services staff will be “pushed” forward to larger operations that have higher transaction volumes and needs. • Segregation of duties is maintained with at least two people involved in every transaction. • Financial data is independently reconciled in a timely manner. 5-03

  41. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure Principles (continued) • Unit management will supervise their own unit fiscal staff and will review and approve all transactions for appropriateness. • Transactions will be independently reviewed for policies and procedures compliance by knowledgeable fiscal support services staff. • All financial transactions will be entered into PeopleSoft by trained and authorized fiscal support services staff. This helps ensure segregation of duties, authorization, compliance, accuracy, and efficiency. Unit staff will have inquiry/report access into PeopleSoft as needed. • Approvers at all levels are held accountable for transactions approved. • Unit and fiscal support services staff performing fiscal activities are appropriately trained. • Controls will be centrally monitored and reported to senior management. • Internal controls will be linked to the Enterprise Risk Management Program. • Use of technology will be maximized for processing efficiencies, financial reporting, and controls monitoring. 5-04

  42. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The service center model that emerged provides the following advantages associated with simplifying systems and processes, improved efficiencies, and best business practices: • Units make own business decisions and manage resources. • Units are able to better focus on their primary mission; doing what they do best. • Once transactions are approved for appropriateness by Unit management, fiscal processing support is provided by Student Affairs fiscal support services operations that are focused on customer services and that specialize in • providing consistent, timely, and accurate fiscal processing, • compliance with and monitoring internal controls, • providing accurate fiscal reports, and • seeking and recommending ways to best use fiscal resources through cost accounting and other data/information means. • As indicated by KPMG, the potential exists for the return of several million dollars in annual benefits back to Student affairs to be used for implementing our strategic initiatives. To achieve these benefits, requires that the service center be fully implemented with standardized fiscal processes, appropriate IT support, appropriate staffing and training, and centralized controls monitoring. 5-05

  43. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure At the November 2007 Student Affairs Fiscal Council meeting, Bill Schwartz provided and discussed the below overview of the Student Affairs fiscal service center structure. Departmental Structure AVP Director Student Affairs Business Office Supervise and train embedded staff Establish SA-wide procedures Liaison with University centralized offices Monitor compliance Reviews exceptions Payroll processing Approves high dollar transactions Unit Business Manager/Office Business Planning Operations/customer service Rates, marketing Reports to director Approvals for appropriateness “Embedded” Accounting/business staff Accounting/reconciliations PeopleSoft processing Timekeeping/payroll Reports dotted line to business manager, solid line to SABO Provides reports and information to support decision-making Approvals for compliance It is assumed that for small units, the director performs the business manager functions. 5-06

  44. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The following slides provide an overview/build of the Student Affairs service center model being implemented for the Student Affairs Housing operations. This first implementation will serve as the “pilot.” From this pilot, and from other future implementations, we will continuously refine the structure and processes. Our intent is to create embedded fiscal support services teams for our larger units or to support several smaller operations. Units that do not have an embedded team providing direct fiscal support services will use the larger Student Affairs central fiscal support services operation for their fiscal support. 5-07 (Support staff and embedded SAFSS staff structure depends on transaction volume, and overall needs of the operation)

  45. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The Student Affairs department (unit) business manager will report to the unit director. The business manager will supervise several unit support staff to assist with the unit-specific fiscal processes and customer service. (The number of unit support staff will depend on the transaction volume and etc.) • Unit CFO/Business Manager: • Oversees fiscal-related customer service and systems support for the unit • Oversees and communicates fiscal status and direction and HR activities of the unit • Hires and manages unit fiscal staff and works directly with embedded fiscal support staff • Performs financial analysis for decision making and capital plans • Approves transactions (front-end) for appropriateness and provides approved transactions to embedded fiscal support staff for further review and entry into PeopleSoft • Maintains unit benchmark information • Recommends budgets, fees, and rates Unit Director CFO (Bus Mgr) • Unit Support Staff: • Provides fiscal related customer service • Provides fiscal-related assistance for unit staff for travel coordination and reimbursements, purchases, and etc. • Assists business manager by compiling needed information for fiscal decision approvals • Performs independent cash handling and balancing activities and preparation/logging of cash deposits • Manages and independently reconciles (daily) unit change funds • Assists in other fiscal and HR-related activities to support business manager, customers, and unit staff Support Staff 5-08 (Support staff and structure depends on transaction volume, and overall needs of the operation)

  46. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The embedded Student Affairs Fiscal Support Services (SAFSS) team will generally consist of four members and will provide primary fiscal processing (in PeopleSoft) support for the unit. • Accounting Supervisor: • Oversees the hiring and management of the embedded SAFSS team • Works closely with the business manager in all fiscal support matters • Is responsible to ensure effective and timely customer service and support and timely general ledger reconciliations are performed by the entire SAFSS team • Reviews and approves transactions • Assists with financial analysis/reporting and fluctuation analysis • Reports (hard line) to the Assoc. Director of Accounting and works with the unit business manager (dotted line) Unit Director CFO (Bus Mgr) • Accountant: • Researches and creates journal entries into the PeopleSoft system for the unit • Provides cost accounting activities/analysis for the unit to identify potential cost savings and new revenue initiatives Support Staff • Procurement Specialist: • Reviews and assists unit with buying activities (using PeopleSoft) after receiving approved information from the business manager • Serves as the PCard reallocator for unit and enters approved travel requests Embedded SAFSS Acct Supv • Account Clerk: • Verifies and enters cash deposits into PeopleSoft • Performs reconciliations Acct Proc Spec Acct. Clerk 5-09 (Support staff and structure depends on transaction volume, and overall needs of the operation)

  47. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The embedded SAFSS (accounting supervisor) will report to the Student Affairs Central Fiscal Support Service’s Associate Director of Accounting. Student Affairs Central Fiscal Support Services Unit Controller/ Director Director CFO (Bus Mgr) Accounting & Budgeting Assoc. Dir. Accounting • Assoc. Director of Accounting: • Oversees the embedded SAFSS team and associated processing and controls • Works closely with the unit business manager on fiscal matters and for performance reviews of embedded staff • Ensures appropriate levels of customer service to the unit • Hires and trains accounting supervisor • Works closely with the Student Affairs Assoc. Director of Procurement to ensure appropriate higher-level support for the procurement specialist Support Staff Embedded SAFSS Acct Supv Acct Proc Spec Acct. Clerk 5-10 (Support staff and structure depends on transaction volume, and overall needs of the operation)

  48. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure The below diagram provides an overview of the Student Affairs fiscal support (service center) structure. The number and location of the embedded teams will continue to be assessed. Univ CFO Stu Affs CFO Unit Controller/ Director Student Affairs Central Fiscal Support Services Director CFO (Bus Mgr) Accounting & Budgeting Procurement Support Compliance & Reconciliations Payroll Processing Assoc. Dir. Accounting Assoc. Dir. Procurement Senior Auditor Support Staff Reconciler Voucher Reviewer Proc Spec A/P Spec Embedded SAFSS Acct Supv Sr. Acct Sr. Acct Procurement Assistant Acct Proc Spec Acct. Clerk 5-11 (Support staff and structure depends on transaction volume, and overall needs of the operation)

  49. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure How did we determine the staffing requirements for the embedded teams? • We reviewed the number of transactions by type that were performed by the supported operation over a three year period. • We then used the base recommended fiscal processes that were provided by the fiscal process workgroups and estimated an average number of minutes that it takes to perform the various actions. • From this combined information, we were able to estimate the number of staff required to perform the various support activities. • We compared our staff estimates to the best business practice estimates that were provided by KPMG, along with their staffing estimates to determine if the FTE appeared reasonable. • As we move forward, we will continuously review our staffing levels and workloads; especially as we are able to continue our processes of maximizing the efficiencies for each processes. • It is important to recognize that every embedded operation may be staffed differently, based on the unique needs of the operation they are supporting. 5-12

  50. Office of Student Affairs Service Center & Standardized Fiscal Processes Guiding Principles and Service Center Structure Other benefits that will be achieved include . . . for the first time . . . . • Student Affairs will have career paths for our fiscal staff. For example, an accounting professional should be able to start in the embedded accountant position, move to a senior accountant position, then to one of the accounting supervisor positions, followed by either a business manager or the Assoc. Director position, then to Controller. Career paths will also be established for the other fiscal support services and unit support positions. • The embedded operations will be located on site at their supported operation. This off-site operation (to central fiscal support services) provides an automatic backup facility for Student Affairs fiscal business continuity planning. • The embedded operations will be augmented by the Student Affairs Central Fiscal Support Services as needed. Priorities for processing will be established and if an embedded operation needs additional support to provide timely customer services, they can rely on the central fiscal support services to assist. Additionally, the other embedded teams can assist as appropriate. • Effective and consistent personnel evaluations can be performed, including input from their supported operations. Evaluations will be tied to pay and over the long-term, we will be able to ensure equity in pay for our fiscal support services staff members. 5-13

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