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  • This is one of several methods for comparing productivity. Others are at the department level, some compare the current period to the same period of the last fiscal year. “Cost” of non-productive time is also estimated and tracked
  • Measurement is one of our company’s values. We strive to make fact-based decisions and drive desired actions by monitoring and analyzing appropriate measures. Working together to find a better way, we implement process improvements across our nationwide network. With standardization of processes, we can move quickly to implement process improvements in our manufacturing and servicing environments. Measurement that contributes to actionable improvement is the key. If you don’t plan take action based on the results of your measure, then reconsider your measure. Good measures drive desired behaviors and results. We recognize that we must have both breakthrough and continuous improvements to remain competitive. Empowering associates to implement continuous improvements (Run the Business) is critical to successful development and implementation of breakthrough (Change the Business) improvements. It takes us all working together with a dual focus. An important measurement tool and listening post for Clarke American is our Voice of the Customer (VOC) process. Servicing and sales representatives seek out partner and customer requirements, log them into our VOC database and route them to appropriate process owners for action or informational purposes.
  • Monte Carlo simulation was invented by the Polish mathematician Stanislaw Ulam, who was also the co-inventor of the Hydrogen bomb. Monte Carlo simulation was also used in the Manhattan project during WW2 to study random neutron diffusion in the development of the atomic bomb. Monte Carlo is a Las Vegas-like gambling town in Monaco.
  • Transcript

    • 1. James Terry PhD, CPA, CTSBO Executive Director of Finance and Accounting Services North East ISD Controllership Function in School Districts Texas Association of School Business Officials Annual Conference - Austin Texas March 2008
    • 2. Controller’s Job More than Financial Control Systems
      • Accounting controls
        • Safeguarding of assets
        • Reliability of the financial records
      • Administrative Controls
        • Plan of organization
        • Operational efficiency
        • Managerial policies
      • Operational Controls
        • Achieving the business objectives
    • 3. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis/Statistical analysis
      • Forecasting
    • 4. The Organization Strategies Processes Activities Tasks Six Sigma Balanced Scorecard The Community Source: Robert N. Anthony and Vijay Govindarajan , Management Control Systems Strategic Planning Annual Planning (Budgeting) Execution Revisions Evaluation Dashboard
    • 5. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis/statistical analysis
      • Forecasting
    • 6. Department Of Finance Executive Director of Finance & Accounting Services E9 Departmental Secretarial Pool Secretary to the Executive Director – C9 Administrative Support Specialist – C7 Finance Secretary– C3 Director of Accounting Services & Payroll E8 Director of Budgets & Financial Control E8 Director of Procurement & eCommerce E7 Director of Risk Management & Employee Benefits E8 Director of Grants Administration / Comptroller E6
    • 7. Office of Accounting Services and Payroll Secretarial Pool Leave Coordinator E3 Payroll Technician C10 Payroll Specialist C8 Accounting Specialist Payroll Deductions C8 Payroll Clerk C4 Payroll Technician C10 Payroll Specialist C9 Payroll Specialist C9 Payroll Specialist C9 Assistant Payroll Manager E3 Payroll Manager E4 District Cashier C6 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Specialist C8 Accounts Payable Supervisor E1 Senior Accounting Manager E5 Accounting Clerk Part Time C3 Accounting Specialist C8 Accounting Technician C10 Senior Accounting Manager E5 Data Technician C4 Director E8
    • 8. Office Of Grants Administration Director for Grants Administration/Comptroller E6 Athletic Accountant Reports to Jerry Comalander E1 Senior Accountant – Grant Administration E2 Executive Director of Athletics Special Education Accountant E1 Instructional Program Specialist C9 Senior Accountant – Curriculum Compliance & School Improvement E2 Senior Accountant – Continuing Education / KIN E2 Executive Director of Finance & Accounting Services Grant Writer Consultant Corporate Development Consultant Director of Community Education Assoc. Supt. of Instruction Assoc. Supt. of Campus Support Secretarial Pool Executive Director of Curriculum Compliance All Executive Directors and Principals
    • 9. Office of Procurement & eCommerce Procurement Warehouses Assistant Director E6 Textbook Coordinator Temporary X1 Manager E3 Specialist/ OWS Inventory C9 Specialist/TWS Inventory C9 Specialist/GWS Inventory C9 Procurement Specialist Frozen C9 Director E7 Material Handler Frozen O4 OWS Warehouse Supervisor E1 GWS Warehouse Supervisor E1 Material Handler O4 Material Handler O4 Material Handler O4 Property Management Technician O1 Property Management Technician O1 Material Handler O4 Material Handler O4 Material Handler O4 Material Handler O4 Material Handler O4 Material Handler O4 Property Transfer Coordinator Pending Material Handler/ Testing O4 Procurement Coordinator E2 Financial Technology Coordinator T3 Technology Specialist C9 Finance Clerk C3 Secretarial Pool Contract Coordinator C10 Specialist/ PO Processor C9 Specialist/ PO Processor C9 Specialist/ PO Processor C9 Facility Usage & Textbook C9 Part-time Specialist/ Facility Usage & Textbook C9 Bid Coordinator C10 Procurement Specialist C9
    • 10. Office Of Budgets & Financial Control Director of Budgets & Financial Control E8 Budget Analyst E1 Vacant VOE Student Div Comptroller for Operations E5 Assoc. Supt. of Auxiliary Services Assoc. Supt. of Business Services Senior Accountant E3 Sr. Accountant for School Nutrition E2 Comptroller for Campus Support E5 Campus Support Technician C10 Comptroller for Business Services & Treasurer E5 Staff Accountant - Treasury E2 Assoc. Supt. of Campus Support Assoc. Supt. of Business Services Assoc. Supt. of Business Services Secretarial Pool Executive Director of School Nutrition
    • 11. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis
      • Forecasting
    • 12. The Controller’s Job Functions
      • Managing
      • Coaching
      • Managing by Objective (MBO)
      • Priorities
      • Mediation
      • Praise
      • Reprimand
    • 13. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis/Statistical analysis
      • Forecasting
    • 14.
      • The administrative cost ratio administrative costs divided by instruction costs, expressed as a percentage.
      The state standard for the administrative cost ratio is 11.05% 6.30% 6.23% 6.04% 6.21% 5.80% NEISD 01-02 00-01 99-00 98-99 97-98 Year
    • 15. INSTRUCTIONAL EXPENDITURES PER REFINED ADA
    • 16. CAMPUS ACADEMIC RATINGS 77% of NEISD’s districts are rated Exemplary or Recognized. Fort Bend is the only large district with similar results.
    • 17. SUBSTITUTE DAYS PARAPROFESSIONALS HS & MS
    • 18. HS ADA by Year by Campus A/B Schedule Linked to PEIMS Discipline TTAD Automated Calling System
    • 19. Auxiliary Services
    • 20. 15
    • 21. Capital Expenditures 16
    • 22. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis
      • Forecasting
    • 23. Financial Analysis
      • Statistical Section of CAFR
      • Inventory Carrying Costs
      • Bank Earnings Credit vs. Investments
      • Cash inflows and outflows
      • Benchmarking – ERG
        • Desktop Analyst
          • APi
          • FPI
      18
    • 24. Financial Analysis
      • Variance Reports
      • Staffing Analysis
      • Teacher Utilization
      • Classroom Utilization
      • Magnet Program Costs
      • Utility Usage
      18
    • 25. Financial Analysis
      • Course Costs
        • Mindsphere
      • Performance Measures
        • APQC
        • OSBC
      18
    • 26. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial analysis/Modeling
      • Process analysis/Statistical
      • Forecasting
    • 27. Measure what you want to change. Source: NEISD Finance Department Performance Measures
    • 28. Processes
      • Planning/Budgeting
      • Teaching
      • Reading
      • Writing
      • Arithmetic
      E X E C U T I O N A C T I V I T I E S
    • 29. Determining Performance y = f (x) The independent variable… 1 is operated on… 2 by a deterministic function 3 To transform it… 4 into an outcome! (the dependent variable) 5
    • 30.
      • Effectiveness (Examples)
      • Industry relative total excess return
      • Operating profit volatility
      • Analysts seen as business partners
      • Balance of both financial and non-financial performance measures
      • Quality metrics
      • Accuracy of forecasts and analysis
      • Use of balanced scorecards, simulation models
      • Percent managers describing budget process convenient and easy
      • Percent of time analytic focus is on proactive decision making
      • Percent of time reports and commentaries address future actions
      • Efficiency (Examples)
      • Overall planning cost as a % of revenue
      • Process cost as a % of revenue
      • Percent of business reports distributed electronically
      • Operations managers use of on-line budgeting tools
      • Staffing levels of process
      • Cycle times
      • Budget iterations
      • Performance reporting productivity
      • Utilization of self-service for inquiry
      • Application complexity
      Using actual data to identify world-class performers in Enterprise Performance Management
    • 31. High Level Process Flows (HLPF) Transportation Value Stream Maping
    • 32.  
    • 33. PEIMS Reporting Process
    • 34. Expenditure Reclassification Process
    • 35. The Controller’s Job Functions
      • Planning
      • Organizing
      • Directing
      • Measuring/Reporting
      • Financial Analysis/Modeling
      • Process Analysis/Statistical Analysis
      • Forecasting
    • 36. Forecasting Into the Future
      • Big numbers vs. small numbers
      • One number vs. many numbers
      • Multiple periods over time vs. limited periods over short periods of time
    • 37. Linear Correlation
      • Two distributions are correlated when a change in one causes a change in another
      • Example: People who eat lots of peas may eat less broccoli (or may eat more…)
      • Usually doesn’t have much effect unless significant correlation (|  |>0.75)
    • 38.
      • Correlation is a dependency between your Xs
        • Correlation does not mean causality!
      • Correlation coefficient
        • Always lies between -1 and 1
        • Measures strength of the linear relationship between two Xs
      Correlation coeff < 0 Correlation coeff = 0 Correlation coeff > 0
    • 39. Crystal Ball Forecasting
      • Crystal Ball offers opportunities to quickly run Monte Carlo Simulations in Excel to improve services
      • Crystal Ball can be customized to do several what-if analyses to achieve quality performance and reduce cost
    • 40. Monte Carlo Simulation
      • Computer-based “experimental” method estimating statistical distribution of output (Y)
      • Steps for Crystal Ball Simulation:
        • Assign each input (X) a value chosen “at random” from its assumed distribution
        • Substitute values of inputs (Xs) into the system transfer function and compute a value of output (Y)
        • Record value of output (Y)
        • Repeat until enough samples of output (Y) characterize its statistical distribution
    • 41. Controller’s Functions Example
      • Measuring/Reporting
      • Financial Analysis/Modeling
      • Forecasting/ Statistical Analysis
      • Planning
    • 42. Identifying Inputs & Outputs Sales Fees Subsidies Inv. Income Employees Bond Holders Vendors Stock Holders Cash Inflows Concentration Cash Outflows 4
    • 43. Enter Historical Daily Rates into a Spreadsheet
    • 44. Create a Line Graph Using the Information in Your Spreadsheet
    • 45. 90 Days of Rates from Three Different Sources - Example
    • 46. Forecast New Chart with Information
    • 47. The Break Even Point Break Even Point (~2/4/02)
    • 48. See the Additional Earnings after Break Even Point Potential Additional Earnings Break Even Point (~2/4/02)
    • 49. Actual Rates vs. Projected Rates
    • 50. Example of the Model Showing Potentially Higher Earnings Break Even Point (~7/1/02) (after maturity date!)
    • 51.  
    • 52. Cash Flow Forecasting
      • Ensures liquidity
      • Enhances cash management practices
      • Forecasts problems
        • Revenues not being collected properly
        • Expenditures exceed budget
      • Increase investment income
        • Amounts available for investment
        • Period of time to hold the investment
    • 53. Controller’s Functions Example
      • Developing Cash Budgets
        • Measuring/Reporting
        • Financial Analysis/Modeling
        • Forecasting
        • Statistical Analysis
        • Planning
    • 54. Assumptions
      • Cash flows for the current year will follow a pattern similar to that of the previous year
      • All of the budgeted revenues will flow in as cash within the fiscal year
      • All budgeted appropriations will flow out as cash during the fiscal year
      8
    • 55. 12
    • 56. 13
    • 57. Assumptions
      • Increase (decrease) in cash balance at the end of the year will be approximately equal to the excess (deficit) of budgeted revenues over budgeted expenditures
      9
    • 58. The Theory
      • Identify an optimal allocation of Funds
        • Funds that need to remain short-term for upcoming disbursements
        • Balance that could be invested longer-term
      • Management of short-term funds based on cash flow analysis
      • Management of longer-term funds based on market conditions
      10
    • 59. The Process
      • Review historical cash balances (typically monthly data for 2-5 years)
      • Determine if there are any “statistically significant” seasonal changes in monthly balances
      • Identify any growth trends
      • Project future balances
      11
    • 60. Current Year Cash Flows
      • Use the percentages calculated and the current budgets for revenue and expenditures to determine the cash flow for the year
      • Determine next year’s cash flows by multiplying percentages times next years budgeted revenues and
      • expenditures
      28
    • 61. Information Required
      • Beginning cash balance of liquid investments
        • Bank Accounts
        • Pool Accounts
        • Money Market Accounts, etc.
      • Par value of outstanding investments
      34
    • 62. Current Year Cash Flows
      • Using the Forecasted Excess (Deficiency) of Cash along with the beginning cash balance and expected fixed income maturities, determine if there are any cash shortages
      • If there are no shortages, determine where fixed income securities could be purchased and when they should mature based on the forecast
      35
    • 63. DAILY CASH MGT.SPREADSHEET Purch Sold Int. CFO CFI 9/01/93 ( - ) ( + ) ( + ) ( - ) ( + ) …… … ... 8/31/94 ( - ) MEANS REDUCING THE BALANCE ( + )MEANS INCREASING THE BALANCE Weekly Cash Flow Management Spreadsheet Cash Budgets ACTUAL CASH 93-94 RECEIPTS SEPT 93………AUG 94 Week 1 2 3 4 EXPENDITURES SEPT 93………AUG 94 Week 1 2 3 4 RECEIPTS SEPT 93 ………AUG 94 1 % % % 2 3 4 % % % EXCESS/DEFICIT SEPT 93………AUG 94 Week 1 2 3 4 ACTUAL ACTUAL ACTUAL CASH % EXPENDITURES SEPT 93 ………AUG 94 1 % % % 2 3 4 % % % GRAND TOTAL 100% GRAND TOTAL 100% ACTUAL CASH % SEPT…………………….  AUG 95 1 $ $ 4 $ SEPT…………………….  AUG 95 1 $ $ 4 $ SEPT…………………….  AUG 95 1 $ $ 4 $ SEPT…………………….  AUG 95 1 $ $ 4 $ FORECAST CASH Excess/Deficit FORECASTED RECEIPTS PROJECTED MATURING INVESTMENTS FORECAST EXPENDITURE = + - FISCAL YEAR FISCAL YEAR CASH MANAGEMENT PROGRAM 21
    • 64. Actual Receipts: Cash Flows in Actual Disbursements: Cash Flows Out Excess (Deficiency) of Actual Cash Flows: 24
    • 65. % of Receipts: Cash Flows in by Week % of Disbursements: Cash Flows out by Week 27
    • 66. Forecasted Receipts: Cash Flows In Forecasted Disbursements: Cash Flows Out Forecasted Excess (Deficiency) of Cash: 32
    • 67.
      • To help make Investment Decisions
            • Short Roll vs. Going Out
      • Make Payroll (Do we have enough money)
            • Matching Maturities to Cash needs
      • End of Year Forecasting
            • Determining Final Budget Amendment
            • Or Fund Balance
      7
    • 68. Forecasting End of Year
      • Using the calculated cumulative cash flows to project end of year expenditures
    • 69. Forecasting End of Year
    • 70. Forecasted Ending Cash Balances (before purchase of any investments) 36
    • 71. The Controller’s Job
      • Jack Welch of General Electrics once said, “If the rate of change outside your organization is greater than the rate of change inside your organization, then the end is in sight.”