Public Sector Budget Formulation and Performance

Public Sector Budget Formulation and Performance

Public Sector Budget
Formulation and
Performance-Based
Budgeting
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
Simon Langford - Financial Consultant
SAP Canada Public Services
GTEC 2011
October 18th-19th 2011
Budget Reforms and Mandates Are Pervasive
• The Government Performance and Results Act
(GPRA) makes this a requirement by
mandating that performance plans display,
generally by program activity, the funding level
being applied to achieve performance goals.
Performance budgeting shifts the focus of
attention from detailed items of expense - such
as salaries and travel - to the allocation of
resources based on program goals and
measured results.
Budget Formulation Business Processes
Historical Data
Modeling &
Forecasting
Adopt & Load
to Control
Personnel
Expense
Projections
Master Data
Integration with
ERP
Centralized
Target Setting
Publishing &
Reporting
Review &
Revise
Supplementals &
Decision Packages
Decentralized
Budget Requests
Government Budgeting Is Getting Tougher
Flat World dynamics create both challenges and opportunities
Diminishing
Revenues
Increased
Accountability
Increased
Demands
Increased
Transparency
More Stakeholders with Increasing Demands
vs. Diminishing Resources
Democracy
Energy
Research
Economic Aid
& Development Public
Broadcasting
Public
Administration
Justice
Constituent
Services
Health
Tax Revenue
Admin
Social
Services
Education
Transportation
Public
Utilities
Defense
Retail Services
Postal
Public Security Services
Banking
Services
Transparency is Becoming More Mandated
EX-NFLD. CABINET MINISTER JAILED IN SPENDING SCANDAL
A former high-ranking Newfoundland and Labrador cabinet minister
has been sentenced to two years less a day in jail
for defrauding taxpayers of nearly $118,000.
Declining Revenues Amid Increasing Demands
Ottawa refuses to rescue AbitibiBowater
84
Thousands of jobs at risk as one of country's oldest companies
and world's biggest newsprint producer files for bankruptcy protection
Dial 311 for Halton Government Services
Learn more about 311
TONY BOCK/TORONTO STAR
CROMBIE BEGS CITY TO RESCUE 39
POOLS
VANESSA LU
Apr. 17, 2009
The tiny perfect mayor came to Toronto
city hall to ask politicians to jump into the
water.
PAUL MOLONEY
Dial 211 for information on community,
health and social services or visit
PBF is Strategic in this Economy
Budgeting is at the Center of Everything
Efficiency: Drives productivity and
reduces costs internally and externally
Insight: Fortifies decision-making and
improves allocation of scarce public
resources
Flexibility: Gives customers flexibility to
quickly adapt solution to meet evolving
requirements
© SAP 2008 / Page 8
Evolution of Public Sector Budgeting
and budget formulation technology
3Public
Budget
Formulation
Business
Network
Get behind the
numbers with fully
integrated text
Link Budgets to
Strategic and
Performance Based
Plans
2 Commercial
Planning
Tools
1
Spreadsheets
Display the numbers
Create simple charts
and graphs
Enter and Calculate
rows and columns of
numbers
© SAP 2008 / Page 9
Build simple
mathematical
algorithms
Flexible and powerful
Personnel Expenditure
Projections
Integration to existing
financial, hr, capital
project, grant, and
performance systems
All centralized and
decentralized budget
formulation processes
accommodated in a
single web-based
system
Older technologies
and “build-it-yourself”
toolkits have failed to
meet the unique
challenges of the
modern public sector
budgeting reality
PBF is Designed to Be Comprehensive
Enterprise Budgeting Solution
Incremental Budgeting
Zero-Based Budgeting
Initiative / Activity / Program Budgeting
Performance Based Budgeting
Budget
Approaches
Highly Flexible
Functional Configuration
To Support Different
Budget Approaches,
Processes, Types and
Outputs
Budget
Processes




Agency/Department
Budgeting
(Requests)
Agency / Department
Budgeting
(Requests)
Central
CentralExecutive
ExecutiveBudgeting
Budgeting(Reviews/Recommendations)
(Reviews/Recommendations)
Legislative
LegislativeBudgeting
Budgeting(Adoption)
(Adoption)
Budget
Execution:
Spending
Allotment/
Budget Execution: SpendingPlans
Plans
Allotment/Allocation,
Allocation,Budget/Position
Control
Budget/Position Control
Budget
Types




Agency/Department
Budgeting
(Requests)
Operating Expenditure
Budgets
Central
CapitalExecutive
Budgets Budgeting (Reviews/Recommendations)
Legislative
Budgeting (Adoption)
Revenue Forecasting
Budget
Grant Execution:
Budgets Spending Plans Allotment/ Allocation,
Budget/Position
Control(6+ Years)
Long Term Planning
Budget
Outputs




Agency/Department Budgeting (Requests)
Financial
Plan / Spending
Central
Executive
BudgetingPlan
(Reviews/Recommendations)
Adopted
Budget
(Control)
Legislative Budgeting (Adoption)
Reporting & Analytics
Budget Execution: Spending Plans Allotment/ Allocation, Budget/Position
Published Budget Document
Control
Key Foundations of SAP Public Budget
Formulation Solution
Ease of Use & Configuration
Salary and
Benefits
Projection

Unlimited Scenarios

Date-effectiveness on all
compensation and
benefits
Table-Driven projections




Integrated to position
control / org
management
Position/employee, job
class, bargaining group
forecasting
Distribution to budget
Line Items, programs,
performance metrics,
etc.
Text Handling
and Publishing






Single point of entry
for budget data and
related text
Real-time reporting of
budgets including text
Customer
configurable Text
Fields
Text intensive
Reporting
Link performance to
Budget Requests
Decision
Packages



Link budget/actual
dollars to text,
performance
measures, etc.
Flexible Forms
& Process
Controls

 Expenditures
 Revenues
 Justification
 Performance
Budget stages and
controls
Security


Audit trails
Reorganizations

Decision cockpit for
package ranking and
decision support
Single point of entry

 Positions
Map to your
different budget
processes
 Base
 Packages
 Capital
 Spending
Plans
Automated budget
book publishing

 Other
Configured by
budget people
Integration: SAP and Non-SAP
HCM, G/L, Budget Control, Position Control, Performance Management
Analytics and
Modeling

Expenditure &
Revenue
Forecasting


Trend Analysis
Top-down
budgeting, metricdriven budget
allocation

Allocation and
redistribution
Public Budget Formulation Foundations
Text and
Publishing
Personnel
Expenditure
Projection
Decision
Packages
Single point-of-entry for Budgets,
Text Justification and Performance
with automated budget book
publishing
Highly configurable date-effective
personnel cost projection
supporting unlimited compensation
plans
Optimize Allocation of Public Resources

Provide policy-makers with the real-time fiscal
impact analysis to support decision-making

Rank and prioritize funding requests
More Efficient Budget Process

Reduce time-consuming data manipulation
and duplicate entry

Automate budget requests, reviews, adoption
and publishing in one comprehensive budget
formulation solution
Flexible Forms with decision
cockpit for package ranking and
approval of requests
Improve Organization Performance

Analysis &
Reporting
Expenditure and revenue
forecasting and Modeling with
trend analysis
Integrate funding requests with strategic
planning and performance management
Greater Control

Distributed
Budgeting
Budget stages, audit trails and
budget state controls with userconfigurable budget form
templates
Control access, data collection and process
flow with provide audit trails to all changes
throughout the budget process
Solution Integration
Planning &
Performance
Management
Capital
Projects /
Grants
Budget
Control
SAP Public
Budget
Formulation
Payroll /
Benefits
Accounting
(G/L)
Position
Control
SAP Solutions:
Manage the Complete Performance Lifecycle
Strategy Management
Are we doing the right things?
Program
Execution
(ERP)
Cost Management
Do our expenditures align with our
strategic vision?
Costs
Activities
Cost Objects
Analytics
SAP Public Budget Formulation
Public
SAP
BPCBudget Formulation
Have we allocated adequate
resources?
PBF Customers

City of San Diego

Marin Water District

State of Louisiana

Fairfax County, VA

South Florida WMD

Fairfax County Schools, VA

City of San Antonio

State of South Carolina

City of Toronto

Texas State University

University of Cincinnati


Texas State University
Chicago Metropolitan Water
Reclamation

Amtrak

United States Department of
Agriculture

Los Angeles Community College
District
http://www.fsa.usda.gov/FSA/midas?area=home&subject=landing&topic=landing
Complement Planning - HR/Payroll,
Financial System, and PBF
HR/Payroll
Public Budget Formulation
Employee
Master Data
Job, Pay Level
Special Pays
Position
Master Data
Benefit Plans
Benefit Rates
Integration
Employee
Master Data
Job, Pay Level
Special Pays
Position
Master Data
Benefit Plans
Benefit Rates
Future Orientation
Financial System
Budgets
Commitment
Item/CE
Integration
Salary and Benefit
Projections
Salary and
Benefit
Budget
© SAP 2008 / Page 17
PBF Calculation Order
Employee
Position
Job
Employee data for salaries and benefits
Position data is used for salaries and benefits of
Vacant positions
Job data is used to calculate salaries and
benefits for business cases and is used if data
is not entered on employees or positions (e.g.
benefits)
PBF calculates such that if the most granular level of data exists (Employee), that
data is used; otherwise PBF looks to the next level (Position) followed by Job.
© SAP 2008 / Page 18
PBF Standard Data Cubes
Projection Cube
• Salary projection scenario results
Position,
Employee
and Benefits
Budget Cube
• Historical actuals and budgets
• Budget form requests
– Amounts
– Positions
Position
Budget and
Financial
Data
• Posted salary projection
Performance Measure Cube
• Performance measure
actuals/planned/budget
Service
Performance
Measures,
Targets,
Actuals
Business User Provides a Fully
Integrated Strategy-to-Execution Offering
Aligned strategic
Enterprise Performance
decision-making
Management
Strategy
across teams
Strategy
Management
Profitability and
Cost Management
Optimize operational
Governance, Risk,
decisions
inside and
and Compliance
outside the company
Business
Planning
Risk
Management
Process
Control
Consolidation
Spend
Analytics
Insight
Unified
Information
Collaborative
Decisions
Business
Network
Optimization
Business Intelligence
Execution
Dashboards and
Visualization
Query, Reporting,
and Analysis
Search and
Navigation
Generate insight from
Advanced
structured/unstructured
and
Analytics
internal/external data
© SAP 2008 / Page 20
Global Trade
Services
Environment,
Health and Safety
Insight
Reporting
Access
Control
across multiple
transaction systems
Manage compliance, risk and
optimize performance across the
business network
Decisions
Information
Management
Data
Integration
Master Data
Management
Data Quality
Management
Metadata
Management
Business Intelligence Platform
© SAP 2008 / Page 21
Business Intelligence Platform
Visualization and Reporting
Enterprise Query Reporting
& Analysis
Reporting via Web
BI Widgets
BI Search
BI Mobile
Crystal Reports
Xcelsius
Seamless MS Office
Integration
Best in Class Enterprise-Reporting and Direct
Access to Data within SAP and non-SAP
Applications
 Ad-hoc Reporting
 Search
 BI Widgets
 OLAP Analytics
 Guided Querying
 Mobile BI
Highly Interactive Visualization and
Dashboarding and Embedded within Microsoft
Office Environment
 Formatted Reporting
 Dashboard and Data Visualization
 Live Office
 Metadata Management
 Entity Extraction
SAP BusinessObjects BI Platform
Reporting
– Crystal Reports
Query & Analysis
– SAP BusinessObjects Web Intelligence
– SAP BusinessObjects Desktop Intelligence
– SAP BusinessObjects Voyager
Dashboards & Visualization
– SAP BusinessObjects Dashboard Builder
– Xcelsius
Business Intelligence Platform
– SAP BusinessObjects Enterprise
– SAP BusinessObjects Builder
– SAP BusinessObjects Live Office
– SAP BusinessObjects Mobile
POLESTAR
• Familiar key-word search to
find business information
– Answers your specific
questions
• Search across all data
sources
– Any universe accessible
source
Directly on data
No previous reports or
metrics need exist
Pre-indexed data provides
fast search and exploration
© SAP 2008 / Page 25
Thank you!
Simon Langford - Financial Consultant
SAP Canada Public Services
[email protected]
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