Office of Budget and Financial Planning
The Office of Budget and Financial Planning (OBFP) is a professional service organization in the Institute's financial administration area. The mission of the office is to provide value-added integrated planning and collaborative budgeting and financial guidance through strategic vision, complex analyses, and access to tools and information. It serves two primary client groups — departments, labs, centers, and administrative areas in support of their financial planning and management responsibilities and MIT's senior management in their leadership commitment to the Institute and the Corporation. The Office of Budget and Financial Planning is an integral part of the Institute's pledge of continuous improvement in planning and budgeting processes to ensure the most efficient allocation of financial assets and the excellence and vitality of MIT.
Current Goals and Objectives
In support of its mission, the OFBP has realigned its goals and is currently undertaking a number of new initiatives.
Budgeting in SAP
Consistent with the goal that financial data should reside in a common database and be the source of all budget and financial performance analyses, the Budget Office, in collaboration with Financial Systems Services, is undertaking a project to integrate the MIT budgeting process from a stand-alone system into our enterprise system, SAP. Primary project goals include:
- Reduction of interfaces between systems and the implementation of a standard technology platform and common user interface
- Integrated budget planning, submission, and forecast capabilities
- The opportunity to review and redesign business processes, including the elimination of duplicative efforts and the substitution of manual processes with systems solutions
- Enhanced functionality both for the external community and internally in the Budget Office.
- All Funds Budgeting, an initiative to provide academic units with tools to budget resources from the general Institute budget, including dollars carried forward from previous years, as well as other sources of revenue.
- Budget-linked position management, enabling administrative units in FY2004 and FY2005, before the full implementation of the SAP HR-Payroll system, to develop budgets and forecast end-of-year results using detailed salary information linked to their department staffing complement.
Other Budgeting and Forecasting Initiatives
There are several related initiatives underway that are integrated into the goals of the Budgeting in SAP (SAPBUD) systems development or that are related to our commitment to provide access to tools and information. Major ones include:
Business and Organizational Modeling
As part of an effort to understand our clients' businesses in greater detail, thereby enhancing our ability to develop strategic information and provide better tools, we are undertaking new types of collaborative studies, including:
- Lines of business analyses
- Local area business plans, including "full cost" burdening, and pro forma responsibility center modeling, to provide a better understanding of revenue and expense flows in an Institutional financial context.
Stochastic Financial Planning
The Institute's financial model has been instrumental in understanding the underlying dynamics of MIT's finances. As such, additional functionality and capabilities have been added; however, they have been surpassed by the demand for increasingly sophisticated analysis. In order to better serve the Institute's needs in this evolving context, the Budget Office is in the midst of a major upgrade of our current planning model to incorporate modular stochastic variables. This effort, leveraging our past activities, also will allow us, at a later stage, to integrate planning capabilities into the SAP framework and introduce them to the larger community.
Capital Planning and Budgeting Model Development
Similarly, the unprecedented capital construction program and the numerous renovation and renewal projects have put pressure on our current capital modeling and budgeting processes. The scale and complexity of these and future projects have led to the need to develop and incorporate a more structured set of tools into our processes. As a consequence, a team is evaluating our current methods and, among other modifications, will propose a new integrated approach to share the resulting information more broadly. The Budget Office is engaging the Department of Facilities and the Treasurer's Office in these efforts to explore possible synergies.
Accomplishments
This year, the Budget Office continued to develop its financial management and reporting capability, including:
- More robust quarterly forecasting for administrative units
- The introduction of designated budgets into the Data Warehouse
- New presentations in the annual Budget Book, including enhanced information on the budgets of academic and administrative units and a continued emphasis on revenue and expense reporting.
Several capital-related analyses, including the East Garage study and the brain and cognitive sciences project, were produced in collaboration with the Department of Facilities and the Treasurer's Office.
The Budget Office also was involved in a team that modeled the Broad Institute, a recently announced partnership with Harvard University and the Whitehead Institute, which promises to deliver the next phase of genomic research.
A formal, two-day MIT Budget and Financial training module was developed in collaboration with Financial Systems Services and members of the community. This model not only serves to introduce new staff to the budget cycle but it also enhances understanding of budget and financial processes, with the aim of improving quality through understanding. This course will be included as a standard offering in the Institute's selection of professional development options.
Administrative Initiatives
The Audit Division and the Budget Office pioneered a type of shared support, increasing effectiveness and saving costs. The units share an administrative assistant and a joint reception area that serves the needs of both offices. The success of this initiative has led to planning for increased shared support among these and other units.
In conjunction with this initiative, the Budget Office retooled its printing environment so that it is more cost effective and requires a smaller share of office space. This printing center also can be shared with other offices.
Future Plans
Future plans center around a two-fold collaborative agenda: pushing enhanced planning and budgeting tools out into the community and pulling more information about the financial and business processes of the community into the central store of knowledge. The goal of this agenda is to augment our ability to manage allocations wisely and look for new, more effective ways to accomplish our objectives. Some of these plans are embedded in our current goals and are underway. For others, we are realigning internal processes and designing tools to focus efforts on value-added activities, keeping our service objectives foremost, and establishing cross-unit and cross-functional partnerships to share information and improve business processes.
Personnel Information
Former director of finance Stefano Falconi left the Institute in January 2003 to accept a position at Carnegie Mellon University. Senior budget officer John Donnelly became a certified public accountant in the fall of 2002. As such, he serves as an accounting resource for the office and a link in cross collaboration with accounting units. Senior budget officer Robert Slauzis provided transition financial management to the Office of the Dean for Student Life for several weeks until new personnel were hired.