Finance & Business Services Finance Forum 29 th May 2014 29 May 2014.

Finance & Business Services

Finance Forum 29th May 2014

29 May 2014

AGENDA

1.Introduction/F&BS Staffing Update (Peter Shipp, Deputy Director, CFFR)

2. Research Accounting – Training & HERDC (Luke Beckett, Mgr Research Accounting & Taxation)

3.Federal Budget Update (Melissa Abberton, AD MR&B)

4.AP Workflow – Tips & Tricks (Trevor Langtry, A/g AD Fin.Ops. & Systems)

Finance & Business Services 229 May 2014

AGENDA

5.University Financial Planning Model (Natasha Murphy, Project Manager SIG)

6.Research Accounting – Costing & Pricing Update (Maria Davern, Program Mgr. RSD)

7.Accounting Standards – Technical Update (Rachelle Conry, Senior Accountant MR&B)

8.General Question Time


F&BS Organisational Structure


Finance Forum29 May 2014

2014 FEDERAL BUDGET UPDATE

THE BIG TICKET ITEMSDEREGULATED FEES FOR

COMMONWEALTH SPONSORED PLACES

CHANGES TO INDEXATION

RTS AND THE CO-CONTRIBUTION

ARC EFFICIENCY DIVIDEND

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DEREGULATION

Main Proposals:Universities may charge fees above the current

HECS caps from 1 January 2016.CGS cluster rates will be cut from 1January 2016

by circa 20% but this will vary across clusters.The number of Clusters will reduce from 8 to 5

tiers.Scholarship Scheme will be introducedGrandfathering arrangements will apply. FEE- HELP will continue but will be amended.

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CGSCGS cluster rates will be cut from 1January 2016 by circa

20% but in reailty this will vary across clusters.Clusters will reduce from 8 to 5 tiers. Some clusters will lead to reduced student contribution

under the proposed model: Humanities – 10%Mathematics – 29%Clinical Psychology & Foreign Languages – 4%

The majority of clusters lead to an increase in student contributions however some significantly

Social Sciences – 59% Communications – 46% Environmental Studies – 107% !!!!!

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SCHOLARSHIP SCHEME

$1 in every $5 (20%) of additional deregulated revenue will be used to fund Commonwealth Equity and Access Scholarships

Scholarship schemes will be awarded and managed by the University

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GRANDFATHERING

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GRANDFATHERINGStatus of Student Grandfathering Arrangement

Accepts and Enrolment Offer before 14/5/14

Current arrangements until 2020

Accepts enrolment offer before 14/5/14 and defers commencement


Accepts enrolment offer before 14/5/14 and is on approved leave of absence


Currently supported students who finish a course and immediately enrol in another UG or PG CSP


Accepts and Enrolment Offer after 14/5/14 and commences before 1/1/16

Current arrangements until 1/1/16 then new arrangements until completion

Students offered enrolment in a PG course but chose to defer before 1/1/16

Not guaranteed a CSP but if offered then current arrangements until 1/1/16

Accepts an enrolment offer after 1/1/16 New arrangements

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FEE- HELP Fee HELP will continue to be made available so

there will continue to be no upfront fee payments However arrangements will be amended:

Income thresholds to start repayment of HELP debt will reduce from $53k to $51k from the 2016/17 The repayment rate will reduce from 4% at this band to 2% on a sliding scale

Indexation of outstanding HELP debt will change from June 2014

Rate will change from CPI, currently 2.9% to 10year Commonwealth Bond Yield, currently 3.8% but capped at 6%

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OTHER CHANGES HECS/HELP benefit to support specific priority areas will

cease from 2015-16 CGS being extended to Diploma, Sub Bachelor and Associate

degrees – no rates yet but will be below Bachelor Levels Lifetime borrowing for Fee Help and VET Help has ceased FEE-HELP loan fee on fee paying UG course removed VET FEE-HELP loan fee for higher level vocational courses

removed CGS to be extended to TEQSA certified private providers Relocation Scholarship Assistance for students relocating

within and between major cities removed Removing Grandfathering for Student start-Up scholarship

recipients13

WHAT DOES IT ALL MEAN

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CHANGES TO INDEXATION Basis for calculating the rate of indexation on

Commonwealth revenues will change from1 January 2016

Currently based on HEGI but will move to CPI HEGI in 2015 will be 1.79%, using CPI in 2015

would have indexed revenues 2.9%. Affected revenues:

NIF HECS CGS Commonwealth Scholarships Research Block Grant Schemes ARC

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RESEARCH TRAINING SCHEMERTS reduced for 2015/16 and will

reduced $173.7M over 3 years

Sector wide 10% effect.

RTS students to be charged a contribution at $1700 low cost courses, $3900 high cost course per EFTS

Unclear how these two proposals will intersect

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ARC EFFICIENCY DIVIDEND

3.25% Efficiency Divided on all ARC administered funding from 2015/16

Current impact estimated at 3.5% of 81M approximately $2.9M for ANU

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OTHER RESEARCH RELATED IMPACTS HC Coombs Policy Funding Ceased - $6.4M

over 4 years (1.6M in 2014/15) Establishment of Medical Research Future

Fund on 1st Jan 2015. The divided, Net Interest on the Capital, estimated at $276.2M over 3 years from 1st July 2015 to fund research including through NHMRC.

Research funding of $3.3M for digitisation of Indigenous Cultural Resources

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OTHER RESEARCH RELATED IMPACTSAdditional $150m NCRIS funding – 1 year

only

Boost to Dementia Research Funding – $200m including $26m through ARC

Cessation of ARENA

NICTA to move to a self funding model by mid 2016

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OTHER RESEARCH RELATED IMPACTS Rural Development Corporation’s will be

given additional $100m over 4 years to fund research in partnership with RDC’s

Continuation of Future Fellowships for mid-career researchers – $139.5m

Amalgamating the National Environmental Research Program and Australian Climate Change Science Program to form a new national environmental Science Program – reduction of $21.7m – impacts to be determined

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OTHER IMPACTS

Higher Education Reward Funding ceased Higher Education Participation Program –

funds are to be reduced by $51.3m over 4 years

300 additional general practitioner places – yet to understand the terms and if ANU is eligible

Impact of DFAT funding cuts

NRAS program to cease

21

22

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AP Workflow – Tips & Tricks

Erin Clements & Trevor Langtry

29 May 2014

29 May 2014 Finance & Business Services 23

Foreign Currency Processing

• Can be confusing

• Invoice currency & Payment currency

• Need to check

• Tip & Technique http://fbs.anu.edu.au/__documents/tips_and_techniques/accounts-payable-workflow/2014_tip_siw_foreign_currency.pdf

24Finance & Business Services

Work Flow Actions

• PushBack – Always comes back to the person who pushed it back - even if you change the business contact or delegate

• Restart – resets each of the steps – delegate, business contact, etc.• Deny – equivalent to putting it in the bin• Reassign – a single step not the whole process around the team• Step not routed can change Business Contact/Delegate without

restart• Intsert Additional Steps – key is to save after insert• Start New Path – use instead of insert so steps can be complated in

parrallel rather than sequentially

http://fbs.anu.edu.au/__documents/tips_and_techniques/accounts-payable-workflow/2014_tip_siw_workflow_actions.pdf

25Finance & Business Services

Monitoring Workflow

29th May 2014Finance & Business Services 26

Monitoring Workflow


Monitoring Workflow


Monitoring Workflow


http://fbs.anu.edu.au/__documents/tips_and_techniques/accounts-payable-workflow/2014_tip_siw_monitoring_workflow.pdf

Checking Of Defaulted Info

• From Vendor• From OCR Process• Some review process by F&BS Staff• Vendor• Invoice No.• Invoice Date• Invoice Amount• GST Amount• Foreign Currency codes – Invoice and Payment


Stats & Turn Around Times

• For 2014 – Average times per step



Invoices Paid on-time (trade vendors only)

•Progressed from really bad to bad•Key contributor is the 19.8 days from invoice date to being scanned•Encourage Vendors to send invoice to [email protected]



F&BS Turnaround Times

•Aim at < 3 Days – 2014 average 0.8

•Vendor Maintenance can slow down process


Duplicate Invoice Checking

• Yes it checks for duplicate invoice

• Where - Vendor ID, Invoice Number and Invoice Amount is the same

• Getting occurrences where business areas are sending the invoice in multiple times

• Encourage vendor to send the invoice to - [email protected]


Team Maintenance

• Responsibility of respective areas

• Contact you relevant College/Admin Finance Manager


Voucher Create

• Don’t forget to create the voucher once the workflow process has completed

• We monitor and remind but it does slow down the process


Why is the voucher not paid

• Credits

• How to Check


Staff on Leave

• Be Proactive or reassign


Collaborative E-Mail

• Updated Tip & Technique – http://fbs.anu.edu.au/__documents/tips_and_techniques/accounts-payable-workflow/2013_quickref_collaborativeapprovals.pdf

• There are constraints

• Restrict use


ANU Financial Planning Model Project

Natasha Murphy, Project Manager SIG


Project purpose…..

• to improve efficiency and effectiveness of the current systems for financial planning and budgeting :

• deliver increased data integrity levels; • implementation of automated business processes; • accessibility and transparency of the information to a

wide range of relevant staff; and • flexibility for growth in the functionality of the business

model and technical support tool.

4129 May 2014Finance & Business Services



Costing & Pricing Budget (CPB) Tool Project

Maria Davern, Program Manager RSD


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Background

• CPB Tool is being developed as an outcome of the Grant Management Framework – Preparation and Revision of Grant & Consultancy Budgets Working Group Review (January 2013).

• Tool has been commissioned by the DVC (Research) and Director, Research Services.

• Tool will support our researchers and professional staff at application phase for externally funded research.

• CPB Policy and Procedure (draft) is under consideration by Executive that establish principles and a formal cost recovery standard to improve consistency, transparency and accountability.


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Objectives of Costing & Pricing Budget Tool

1.To capture accurate costing and pricing budget data for externally funded research in accord with external and internal compliance requirements.

2.Enabling full cost estimation (direct + indirect), and to improve cost recovery, for externally funded research.

3.The storage and presentation of budgets for approval and price presentation.

4.Enabling interoperability with relevant enterprise systems.

5.Establishing efficient and effective workflow for improved business process management.

6.Producing accurate reporting and analytics.


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Present State – Costing & Pricing BudgetsDriver Implication

1 ComplianceANU is a Registered Research Agency under 29A of the Industry Research & Development Act 1986.

Competitive Neutrality

Cost Recovery

Under “Pricing Criteria” of this Act, it states that Organisations that do not charge ‘ordinary commercial terms’ (market rate, full cost recovery or full cost recovery plus a normal profit margin) for these services are only eligible if they are able to show that they are NOT using government resources, such as appropriations and grants, to subsidise their services.

ANU is not legally subject to ‘Competitive Neutrality’, however it has agreed to observe the principles.

ANU supports the principles of ‘Cost Recovery’ requirements.

2 Sustainability More research dollars in tight times.

3 Value ANU provides external funding collaborators access to world class research expertise and facilities. The cost of this access is currently not reflected in the market pricing of research and consultancies.

4 Transparency Required by funders without disclosing commercial information.


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Current State – Costing & Pricing Budgets(cont) Driver Implication

5 Formal costing and pricing principles for grants and consultancies.

ANU has inconsistent approaches to costing and pricing budgets including different approaches to indirect cost and in-kind contributions in application phase.

There is no clear guidance or understanding of what constitutes direct, indirect and in-kind costs, and the full range of costs that should be budgeted for.

6 Audit implications of inconsistent costing & pricing practice at ANU

The recent internal audit (January 2013) demonstrates the requirement for greater consistency across ANU.

7 Efficiency and effectiveness improvements

There is need for clear guidance, process and structure in budgeting at application stage. In particular, the recovery of full cost of externally funded research is poorly understood

8 Compliance responsibility ANU is responsible for managing legislative, regulatory, and organisational compliance activities across research activities. Without adequate compliance practice and associated support systems and tools, ANU is at risk of incurring reputation damage.


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Approach & Progress

• Agile approach to communication and collaboration has been adopted to ensure that the project progresses at a consistent pace through development of the product with opportunities for refinement following input from users.

• A prototype will be developed and socialised• Project Plan and Governance arrangements in place• High level requirements near completion.• Seven requirements gathering workshops involving

seven colleges and a group of School Managers completed across the University.


Governance


Timeline: CPB Tool Project


52

Questions

Thank you!


Accounting Standards Update

Rachelle Conry, Senior Accountant MR&B


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Overview

• 2013 Reporting Year

– AASB 13 – Fair Value Measurement

– AASB 119 – Employee Benefits

• 2014 Reporting Year

– AASB 10 – Consolidated Financial Statements (2014)

– AASB 11 – Joint Arrangements (2014)

– AASB 12 – Disclosure of Interests in Other Entities (2014)


AASB 13 – Fair Value Measurement• Effective 1 January 2013 prospectively• A single standard that

– defines fair value– sets out a framework for measuring fair value– requires disclosures about fair value measurement

only when another standard requires/permits an asset, liability or an entity’s own equity instrument to be measure at fair value.

• Scope exclusions– Share based payment transactions in the scope of IFRS 2– Leasing transactions in the scope of IAS 17


AASB 13 – Prior FV DefinitionPrior fair value definition Weakness

The amount for which an asset could be

exchanged or a liability settled between

knowledgeable, willing parties in an arms length transaction

It did not specify whether an entity was buying or selling the asset

It was unclear what settling meant as it did not refer to the creditor

It was unclear about whether it was market based

It did not state explicitly when the exchange or settlement takes place


AASB 13 – New FV DefinitionNew fair value definition Improvement

The price that would be received to sell an

asset or paid to transfer a liability in an

orderly transaction between market

participants at the measurement date

It specifies that the entity is selling the asset (exit price)

It refers to the transfer of a liability

It is not a forced or distressed sale

It is clear it is market based

It states explicitly when the sale of transfer takes place


AASB 13 – FV Measurement Model• Takes into account characteristics of the asset or liability that

a market participant would take into account at measurement date

• Assumes an orderly transaction between market participants at the measurement date under current market conditions

• Assumes transaction taking place in the principle market, otherwise the most advantageous market

• For non-financial asset takes into account its highest and best use

• For liability reflects non-performance risk including own credit risk


AASB 13 – Fair Value Hierarchy• Level 1: quoted prices in active markets

– Unadjusted– Identical assets/liabilities

• Level 2: observable, but not quoted– Based on publicly available information about

actual transactions

• Level 3: unobservable


AASB 13 – Valuation Techniques• Cost Approach

– Current replacement cost

• Market Approach– Prices and other relevant information generated by

market transactions involving identical or comparable items

• Income Approach– Convert the future amounts into a single current

amount


AASB 13 - Disclosures

• Disclosures previously only required for Financial Instruments now required for all items held at Fair Value

• For items held at level 2 & level 3 disclosure to include additional data about the unobservable inputs


AASB 13 - Example


AASB 13 - Example


AASB 119 Employee Benefits

• Changes to:– Defined benefit plans– Short-term employee benefits– Termination benefits


AASB 119 – Employee Benefits

• Short-term employee benefits – e.g. annual leave– Definition of a ‘short term employee benefit revised:

Employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which employees render the related service

– Definition looks at when an employee benefit liability is expected to be settled as opposed to when it is due to be settled.


AASB 119 – Employee Benefits• Requirement to assess annual leave obligations based on

historical trends of employee activity to determine whether annual leave entitlements have historically been utilised in full within 12 months of balance date– If so will be a ‘short term liability’ measured at nominal value– If annual leave entitlements carry forward for > 12 months from

balance date, entire annual leave obligation will still be measured as a other long term benefits (similar to long service leave). Current/non-current classification is unchanged only measurement is impacted as an other long term employee benefit as the liability is not expected to be settled wholly within the next reporting period.


AASB 10-12 – Interests in Other Entities

• Interests in Other Entities

– AASB 10 – Consolidated Financial Statements

– AASB 11 – Joint Arrangements

– AASB 12 – Disclosure of Interests in Other Entities

• Changes to the definition of control, no longer based on the 50% test


Questions?



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Finance & Business Services Finance Forum 29 th May 2014 29 May 2014.

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