ORIENTATION FOR NEW HEADS & CHAIRS OFFICE OF BUSINESS & FINANCIAL SERVICES BEST PRACTICES AND COMMON PITFALLS

Transcription

1 ORIENTATION FOR NEW HEADS & CHAIRS OFFICE OF BUSINESS & FINANCIAL SERVICES BEST PRACTICES AND COMMON PITFALLS VANESSA PEOPLES ASSISTANT VICE PRESIDENT FOR BUSINESS AND FINANCE/CHIEF BUSINESS OFFICER OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 1

2 OBFS OVERVIEW WHAT S TRENDING IN OBFS FUNCTIONAL AREA PITFALLS SUMMARY OF BEST PRACTICES OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 2

3 OBFS MISSION AND PURPOSE The Office of Business and Financial Services provides business and financial management services in the most cost effective manner to the three campuses as well as the system at large. Foundational business transaction processing Accounting and financial reporting Liaison to external agencies for business matters Compliance activities Solve complex business and policy issues OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 3

4 ACTIVITIES WITHIN OBFS Issues payroll checks and administers benefits Procures and pays for all goods and services Administers all post award (financial and compliance) grant activities Develop policy; training and communications AMONG OTHER THINGS. Bill and collect all student tuition and fees Execute the Budget and provide financial/monitoring analysis to the campus Execute most contracts on behalf of system and campuses OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 4

5 OBFS AT A GLANCE OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 5

6 WHO DOES OBFS SERVE? ,292 We are a staff of 428 serving 105, , OBFS FTEs Students Faculty OBFS FTEs Students Faculty 80,292 Students 24,974 Faculty and Staff University-Wide Budget $5.64 B OBFS $41.8 M.07% of Total Budget OFFICE OF BUSINESS AND FINANCIAL SERVICES 9/20/2016 6

7 WHAT S TRENDING IN OBFS Hiring freeze and substantial budget cuts Re-thinking service delivery model to provide adequate service and support to the campuses Large, complex and heavily regulated environment Competition for everything (e.g. research dollars, faculty and staff) Engaging faculty and business managers in administrative and business matters OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 7

8 GRANT ADMINISTRATION ESTABLISH INTERNAL CONTROLS TO ENSURE COMPLIANCE Regularly and routinely monitor internal controls to ensure compliance PITFALL/CONSEQUENCES Failure to regularly monitor internal controls regarding expenditures can result in: Audit findings / questioned costs Additional administrative burdens Potential overdrafts Forfeiture of unobligated balances Tarnished reputation from all of the above TIP: To create a strong internal control environment: PIs & BMs should review award terms/conditions & plan spending accordingly Before the fact expenditure monitoring After-the-fact monitoring OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 8

9 FUND MANAGEMENT ALL FUNDS SHOULD BE MANAGED APPROPRIATELY SELF-SUPPORTING FUNDS - All costs charged to self-supporting funds should be related to the revenues coming into the fund PITFALL: Common mistakes include unrelated costs charged to a selfsupporting fund or related costs that could be charged, but are not TIP: In times of diminishing state dollars, fully costing self-supporting activities can mean more available state funds for other uses GIFT SPENDING - Gift spending must be in accordance with donor intent PITFALL/CONSEQUENCE: In some cases unit records do not include or staff do not monitor proper historical documentation related to incoming gifts and over time this can result in spending to drift from the donor intent OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 9

10 CONTRACTING INITIATE PURCHASING PROCESSES AS SOON AS A NEED IS IDENTIFIED - There are many factors outside of University control (e.g. State oversight), so you can never start the process too early! PITFALL: Goods and services being received without a purchase order in place, i.e. a non-conforming purchase TIP: Units should follow the procure-to-pay process (also known as req to check ) VALIDATE CONTRACTS ARE SIGNED AND EXECUTED BY APPROPRIATE PERSON - For an agreement to be binding on the University, The Board of Trustees of the University of Illinois is the contracting party and the Comptroller of the University is the signatory PITFALL/CONSEQUENCE - Contracts signed by a unit/department faculty or staff are non-enforceable and can potentially expose the signer to personal liability OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 10

11 THINGS TO BE MINDFUL OF BEST PRACTICES To help reduce the administrative burden on faculty build a strong partnership between the Business Managers and other administrative team members Remind units to routinely review financial status Discuss Segregation of Duties, ensuring no one person can initiate, process, record and reconcile transactions without reasonable assurance of detection by another person OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 11

12 QUESTIONS AND DISCUSSION OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 12

13 ADDITIONAL SLIDES Employee Payroll Processing Expense Reimbursement Payables OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 13

14 EMPLOYEE PAYROLL PROCESSING ENSURE UNITS ADHERE TO APPOINTMENT PROCESSING/TIME ENTRY DEADLINES - Ensure safeguards are implemented that guarantee new appointments and employee hours are regularly submitted in a timely manner by all units New appointments must adhere to deadlines found on the U of I Payroll Schedule PITFALL/CONSEQUENCE: If safeguards are not implemented and key deadlines and dates are not met, employee pay will be subject to the pay cycle schedule and could be late TIP: Remind units that to ensure appointments are entered into Banner system by the deadline, Human Resources must receive HR FrontEnd (HRFE) transactions by the deadline provided by each campus HR office OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 14

15 EXPENSE REIMBURSEMENTS TRAVEL EXPENSE MANAGEMENT (TEM) - All TEM items must be complete and provide a detailed business purpose PITFALL: Incomplete TEM requests result in rejected items and audit findings mainly for: Incomplete business purpose Remit address in ER does not match vendor invoice, or is invalid in Banner No proof of conference lodging Requests to reimburse students when they receive the benefit of the expense must be for a University business purpose/benefit No proof of currency conversion for foreign receipts TIP: Always detail who, what, when, where and why? OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 15

16 PAYABLES CONFIRM UNITS ARE CREATING PO INVOICES IN ACCORDANCE WITH POLICY Initial PO invoices must contain all pertinent information and s regarding invoices on hold must be responded to in a timely manner PITFALL/CONSEQUENCE: Inaccurate or incomplete information will result in a delay in payment. The common reasons why a PO invoice is put on hold include: Over tolerance ($150 or 10% of each line on regular order, on PO total for standing orders) There is a change pending to the tolerance thresholds Non-conforming (invoice date precedes PO date) Item Add (invoiced item not on PO) or substitution by vendor Incomplete line item detail (lack of this detail means that Payables cannot accurately match invoice to PO) Over $50K invoice on a standing order (unit must respond with approval to pay) TIP: All invoices MUST include: PO number (valid, current & with sufficient funds) Unique invoice number Invoice Date Invoice Total Vendor remittance address Line item detail OFFICE OF BUSINESS AND FINANCIAL SERVICES EAVP 16