Budget Tracking BC Financial Healthcare Professionals Society October 4, 2010 - Concurrent Session B 1 Brenda West, Fraser Health Chas Moore, Interior Health
Why would a budget change? Annual process, three year funding letter… …but subject to perpetual change: Balanced budget directive 3/17/2018 New or changed funding Free template from www. brainybetty. com Details after concept approval 2
Maintaining Relevance • Starts at the top…is the budget used for: – Strategic planning – Allocation of reductions and new funding – Assessing management competence • Annual budget quickly becomes outdated – – 3/17/2018 Rolling budgets adjusted every period Departmental reports show adjusted budget At least annually meet with every manager Detailed budget to department & object code Free template from www. brainybetty. com 3
Rolling Departmental Budgets • Creation of base budget: – – Starting point is prior year’s budget Annualize programs that changed mid-year Reverse one-time issues in budget Global changes: wage adjustments, inflation • Budget is adjusted throughout year – Managers have discretion within their portfolio • Expansion and targets held in contingency – Posted to departments as decisions made – Health care is dynamic: 400+ adjustments/period 3/17/2018 Free template from www. brainybetty. com 4
Why bother tracking changes? When… û Budget may be unrealistic û Managers not held accountable û Focus is on trends in actuals Because… ü More control = more relevance ü Analyzing variances is more effective ü Enables managers to explain ü Reinforce strategic objectives 3/17/2018 Free template from www. brainybetty. com 5
How to track budget changes? Use databases that track changes to operating budgets at department level • Both Fraser & Interior developed in-house • Essentially a parallel general ledger • Changes tracked by reason/theme 3/17/2018 Free template from www. brainybetty. com 6
What level of detail is tracked? • • All financial & staffing statistical amounts Department and object code Theme/reason for adjustment Staffing: – hours/FTEs by job code • Interior in total; Fraser by rotation – rate & step – type: regular, stat, overtime, vacation, sick, premiums • Commitment, if unallocated funds • eg. Interior budget lines – Financial: 34, 361 accounts with budgets <>0 – Staffing: 5, 060 combinations of department/job code 3/17/2018 Free template from www. brainybetty. com 7
How did you spend that funding? • No clue – We cannot split actual spending from other transactions in department • We can explain how budget was changed – Able to use budget as proxy for actuals 3/17/2018 Free template from www. brainybetty. com 8
Interior Health query 3/17/2018 Free template from www. brainybetty. com 9
Interior Health query export 3/17/2018 Free template from www. brainybetty. com 10
Interior Health: query export as pivot table 3/17/2018 Free template from www. brainybetty. com 11
Fraser Health query results 3/17/2018 Free template from www. brainybetty. com 12
Sample Department Staffing Summary 3/17/2018 Free template from www. brainybetty. com 13
How do you adjust the budget? • Double entry accounting – Provide description, theme, 1 x or base – Audit trail (who, when, why) • Staffing linked to financial budget – Fraser: input rotation dollar impact – Interior: input hours dollar impact • Unallocated funds use tracking number 3/17/2018 Free template from www. brainybetty. com 14
Fraser: Staffing Data Entry Form 3/17/2018 Free template from www. brainybetty. com 15
3/17/2018 Free template from www. brainybetty. com 16
Interior Health budget adjustment form: Changes must net to zero at account level Must include staffing detail if impact 3* EOC Explanation for entry Backup for adjustment (approvals, rotations, analysis) Funding sources for themed data extracts Indicate commitment if contingency account 3/17/2018 Validation routines Indicate whether 1 x or ongoing Free template from www. brainybetty. com 17
Interior Health completed example 3/17/2018 Free template from www. brainybetty. com 18
How do you approve changes? • Only Finance has access • Business support works with managers & executive – Fraser: backup in hardcopy file – Interior: image of backup saved in database • Revised budgets shown on statements each period • Board is advised in summary – Fraser: each quarter – Interior: bimonthly 3/17/2018 Free template from www. brainybetty. com 19
Unallocated funds & reductions? • Each initiative has tracking number • Held in clearing accounts by sector • Each period report unallocated funds (debits) & strategic reallocations (credits) • Allocate to department as decisions made • Unallocated funds linked to forecast 3/17/2018 Free template from www. brainybetty. com 20
üRelevant budgets influence decision making …needs to be timely and accurate üGive managers control over budget …they spend less time complaining about it …they feel more engaged with financials …they can use it to identify opportunities üCan use budget as proxy for actuals …instead of project accounting system üSimplify variance analysis …by eliminating “approved” variances üNeed standards for changes …when, to avoid budget chasing actuals …how, to maintain consistency & quality 3/17/2018 Free template from www. brainybetty. com 21
Questions? 3/17/2018 Free template from www. brainybetty. com 22
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