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Optimum utilization of funds through the year, minimizing liability of returning unused funds by David Johnson.

  1. ICRISAT FINANCE PRESENTATION GPM 2019 David Johnson Director Corporate Services
  2. DRIVER •Intense scrutiny in the light of the Historical Financial Irregularities and the Qualification by the External Auditors of the Financial Statements FY2017 •New External Auditor FY2018 and Introduction of IFRS (international Standards) (2nd year) •Operational Budget Deficits in last years and Evolving fund mobilization and management INNOVATIONS •1. Revised Budget Process (IBM) •2. Burn Rate/Utilization Management •3. Enhanced Discipline in closing process •4. Global Linkages and Coordination EXECUTIVE SUMMARY Looking forward
  3. Corporate Services - FINANCE – VISION TRANSPARENCY – ACCURACY – PERIODICITY – OVERSIGHT – Include all revenue and expenditures, all agencies record actual transactions and flows on time All processes will be well defined and monitored over time Financial flows would be thoroughly monitored F N A N C E
  4. IBM - New Budget Planning 2019 process for a balanced organizational budget Enhanced utilization rates for grants/projects for stable and sustained utilization 1 FINANCE STRATEGY 2019 UPCOMING INITIATIVES 2 3 OUTCOMES Timely Periodic Closing process for enhanced financial management 4 Global Linkages, L&D and other initiatives for improved people management Minimize budget deficits: Effective financial management through planning, programming, monitoring and evaluation Effective funding utilization: Optimum utilization of funds through the year, minimizing liability of returning unused funds 1 2 3 Comprehensive Monitoring: Fixed regular book closing calendar to ensure accurate capture of organizational financial flows 4 Enhanced global engagement – Improve coordination, skill diversity and reduce disruption risks due to staff exit through job rotation
  5. 1. IBM - 2019 Decision Unit •Research Units •Non Research Units Decision Packages •Estimates •Activities Evaluation •Review of Packages •Consultation Approval •Review •Approve • The new budget mechanism - ICRISAT Budget Management (IBM) for 2019 - aims to replace the incumbent budget process with a forward-looking data-driven budgeting process and create a requisite policy and control framework. • The entire financial planning process is now structured with well defined roles, specific responsibilities and timeframes for all organization (Research and Non Research and Global). • Extensive consultations with RPDs and unit heads have been completed. Currently, executing the implementation of IBM across Research/Non-Research. Task team in finance in place to support. • Positive feedback received on the methodology and what the new method of budget management can bring – Transparancy. • Implementationplanned to conclude by beginning March 2019. (2018 Budget Planning completed in March 2018) IBM FRAMEWORK
  6. 2. Managing ‘BURN’/‘UTILIZATION’ rates • Burn Rate/UTILISATION is the rate at which finances allocated are expended by project/delivery unit, E.g.: $1000 per month. • Monitoring and Managing ‘Burn Rate’ is an important management metric as it provides greater visibility into delivery of project activities and productivity/availability of pro gram/delivery unit. • Negative Impacts of lower than expected ‘burn’ rate…NCE, PI commitments and coverage, Operational, programme management, recovery of overhead costs……Institutional spend… • Scientist/expert time management and utilization targets are set in the Annual Workplanning and Programme Budget , either in terms of more activities per project or taking up new projects. • increase overhead recovery from projects and in turn recover indirect costs such as admin costs from grants rather than ICRISAT reserves •Periodic review of burn rate on projects •Increase/decrease burn rate Monitor ‘Burn’ Rates •Spread recovery across funding type •Reduce institutional spend Improve Programme Management and Cost Recovery •Scientist/ Expert Time Management • Full Cost Coverage and Management Effective Management of Staff Input and Costs •Financial Management •Progrramme Management Programme Management
  7. 3. PERIODIC BOOK CLOSING • Closing Books is an important activity of finance. It impacts multiple functions such as External Audit, actual expenditure assessment etc. • Traditionally at ICRISAT, guidelines around book closing are not enforced firmly. This results in closing activity extending beyond acceptable closing period. • Absence of firm timelines results lack of discipline in terms of booking transactions on time and undue pressure during year close to book all transactions. • By implementing periodic closing process, HQ will increased control over enforcing booking discipline by unit finance managers and securing relevant proofs at the appropriate time from reporting. • Months 3 and 9 provide Soft close and provide limited flexibility in terms of recording transactions within the system. • Months 6 and 12 are Hard close periods and there is very limited flexibility to make any edits post recording transactions Month 3 • Soft Close Month 6 • Harder Close Month 9 • Soft Close Month 12 • Hard Close
  8. 4. Global Linkages, L&D, Initiatives • Global Network and Linkages: Combined reporting lines for finance functions. Centralized budget reporting systems. • Knowledge Transfer: Engage and improve competencies of workforce through organized L&D plan and other initiatives such as Job rotation etc. • ERP and Digital Management: Increased use and transparency of web portal for budget management. Assessments and introduction of ERP (Enterprise Resource Planning)…OCS ? • Recruitment, Job Rotation and Mobility: The finance staff has been executing the same set of responsibilities for years, spanning decades in some cases. • Learning and Development: In consultation with Human Resources, Finance team would develop L&D calendar for the global finance team and envisage other programs such as Job rotation based on staff interests and function requirements.
  9. CONCLUSION By revisiting existing processes we aim to look at where the organization is now, where we would like to be in three to five years’ time and how we plan to achieve our financing targets. By executing he Finance strategy 2019 we aim to maximize the utilization of all financial support received within the bounds of ethics and regulatory compliance. 2019 Priorities • Revised Budget Process (IBM) • Burn Rate/Utilization Management • Enhanced Discipline in closing process • Global Linkages and Coordination
  10. Corporate Services: Finance – Q&A
  11. Thank You
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