Top 5 Project: Finance Issues, Recommendations, and Decisions

The issues and recommendations presented in this document are:

Issue 1:  Determining How Much Money There Is and How It May be Used

It is difficult to answer questions about the amount of available money or how it may be used. The problem is compounded by the lack of a fully fledged budget management and reporting tool that takes into account all funding sources, not just GOF and DOF. Determining the amount of money that can be used is a two-part question:

  • How much money do I have?
  • This question addresses the basic problem of determining if a budget is over-spent or under-spent.

  • Can I spend it and if so, how may I spend it?
  • This question addresses the various types of funds and the differing rules governing them; rules that restrict how those funds may be spent. For example, a gift may only be available to a specific department within a school, college, or campus; or only for specific purposes such as a scholarship or to defray equipment costs. These funds are available; but they are not available for uses other than the ones specified.

Examples:   Some examples of difficulties encountered because of this issue are:

  • Determining encumbrances and guaranteeing their accuracy

  • Determining the beginning balance of a fund at any point during the fiscal year

  • Determining how available funds may be spent

Impact:   Schools, colleges, and campuses create their own tools, creating the potential for issues with data integrity, security, and consistency. They download their data from different sources using different delivery mechanisms. As a consequence of trying to answer this complex question, there are a plethora of local systems and the expenses incurred to keep them running.

Underlying issues:    The central systems cannot store and share data in the manner needed. In addition, there is a lack of a shared, centrally available budget projection tool.


Short-term:  Create common awareness of the different tools (“shadow systems”) that departments, schools, colleges, and campuses are using to perform budget and planning tasks. There may be opportunities for consolidation of tools.

Mid-term:  For several years, there has been a proposal before IMAC to add a budget projection module to the Financial Desktop. This proposal was resubmitted in 2007, but no action was taken. Make a final decision on this proposal.

Long-term:  New UW financial systems have budget projection capabilities.

Deans’ and Chancellors’ Advisory Group Decision:    At the March 14, 2008 meeting, the Deans and Chancellors agreed that a common budget projection system is needed. They suggested that we gather information about the shadow systems being used on campus and determine if it makes sense to manage one of them centrally for use across campuses.

Issue 2:  Inability to do Cross-Unit Accounting

As a result of the growth of the University and the evolution of its programs, there is a need to manage and report the financial operations of the University across schools, colleges, campuses, departments, and units. For example, grants and contracts, as well as other types of funds, may span multiple departments and units.

We do not have the policies, procedures, business processes, and accounting and reporting tools to effectively manage cross-unit finances. Currently, there are verbal agreements about how to handle specific instances; however, there are no contracts or published guidance.

Examples:   Here are two examples:

  • Allocating, managing, and reporting Bioengineering program dollars across the Schools of Medicine and Engineering.

  • Managing and reporting when there is a difference in the beneficiary of a budget and the entity with fiduciary responsibility. For example, Educational Outreach has fiduciary responsibility for an iSchool academic program budget and the iSchool manages and benefits from these funds.

Impact:   It is difficult to do meaningful reporting of cross-unit finances. The University’s need to do cross-unit financial reporting will only continue to grow, exemplified by the University’s stated core value of collaboration. Departments, schools, colleges, and campuses have created departmental shadow systems with extra data fields in order to manage cross-unit accounting.

Underlying issue:   Lack of policies, procedures, training, and tools to manage cross-unit finances. This issue is a fundamental one. It spans all three of the Top 5 areas: student, faculty, and finance.


Short-term:   NA

Mid-term:    Determine the rules for cross-unit counting in the student and faculty areas. The rules for accounting should flow from the rules established in those two areas.

Long-term:    NA

Deans’ and Chancellors’ Advisory Group Decision:    At the March 14, 2008 meeting, the Deans and Chancellors recommended that we adopt the mid-term recommendation.

Issue 3:  Moving to Fiscal Year Accounting and Reporting

The University is moving toward managing its business on a fiscal year basis. The accounting and reporting time period needs to move correspondingly as the business model evolves. Currently, the University uses multiple accounting and time periods, depending on the fund type:

  • Biennium time period for State funds

  • Project period for grants and contracts

  • Annual time period for gifts and self-sustaining, and the annual report to the Board of Regents

  • Quarterly time period for endowments

Example:    State funds are allocated on a biennial basis, but managed locally on a fiscal year basis.   

Impact:    This issue is another reason why it is so difficult to determine how much money an entity has to spend.

Underlying issue:    Currently, there are multiple accounting and reporting time periods.


Short-term:   NA

Mid-term:   NA

Long-term:   The Finance Task Team recommends a fiscal year accounting and reporting time period be adopted. This recommendation mirrors current thinking about how the University should be managed.

Deans’ and Chancellors’ Advisory Group Decision:    At the March 14, 2008 meeting, the Deans and Chancellors recommended that we adopt the long-term recommendation.

Issue 4:  Complex, Not Fully Understood UW Organization Structure

The organization code structure used in reporting financial data represents the organizational roll-up for financial statement presentation. The current structure lacks the flexibility to adequately organize information to satisfy other operational needs, such as the staff and management hierarchies. Historically, it has been difficult to modify the organization code structure such that organizational changes are reflected in the financial data reporting.

Examples:   As an example, University senior management was recently reorganized with the retirement of Weldon Ihrig. It is unclear if these changes impact the financial roll-up of the data, but the organizational data structure in the current system does not reflect the current organization.

Impact:   The lack of flexibility hampers reporting needs of the units. 

Underlying issue:   The organization structure is outdated. It is used for multiple purposes – academic and administrative – but it is not used consistently across the multiple purposes.


Short term:   Explore this issue and generate ideas for aligning the uses of the organization structure.

Mid-term:   NA

Long-term:   Manage the organization structure as master data with the appropriate governance.

Deans’ and Chancellors’ Advisory Group Decision:    At the March 14, 2008 meeting, the Deans and Chancellors recommended that we adopt the long-term recommendation.