Hyperion Higher Ed User GroupA

Comprehensive Planning and Reporting Model

for Higher Education: Hyperion Strategic Finance
Andrew Harker, Ed. D
Director of Budget Management, Stanford University

Higher Ed Financial Management

What are the challenges we are facing?

An increasing desire to have continuous, comprehensive planning
and reporting
The challenges/struggles of making (external) GAAP-based
financial reporting mesh with (internal) fund accounting-based
reporting
The systems we have/are putting in are not all that conducive to
this type of reporting (for fund accounting, for higher education)

Board/Senior management expectations sometimes dont align

with our reality
Yahoo! and Cisco close their books and report in days, every
month
Dashboarding/KPI is easy and helpful in Corporate America
Reports they are used to are simple: all money is green
Reports should be straightforward and easy to comprehend

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 2

3 Broad Components

Actual Revenues, Transfers, Expenditures, Assets, & Liabilities

Coming from the General Ledger (legacy, Oracle, SAP, Banner,
etc.)

Detailed Budget
Coming from Hyperion Planning, Hyperion Pillar, Excel, etc.
Most often only for Income Statement items (Revenue & Expense)

Long-Range Forecasting

Multiple year, what-if scenarios, aggregated data

Done most often in Excel
Usually not integrated into other systems
If multiple units are doing modeling, other units tend to be in the
dark

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 3

What have we been working with at Stanford?

Hodge-podge of financial information systems

Controllers Office responsible for preparing the external GAAPbasis financial statements using a third-party consolidation tool
University Budget Office coordinates preparation of detailed fund
accounting basis budgets in Hyperion
Long-Range modeling done in Excel
By multiple units (Central, Med School, Business School)
Totally disaggregated and disconnected

Variance Analysis and Reporting done as a separate process, in

separate systems
If tied together at all, nominally tied to detailed budgets only

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 4

University Financial Structure

Stanford Consolidated
Financials
University

LLCs

Hospitals

Non-formula Units
(Provost GF Allocations)

Auxiliary Enterprises

School of
Medicine

Graduate
School of
Business

Continuing
Studies/
Summer
Session

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 5

Consolidated Budget by Fund Type

$ in millions
Auxiliary
General
Grants & & Svc Ctr
Funds Designated Restricted Contracts Activities

Projected
2004/05

Total

2,716.6

Total Revenues

746.1

456.2

579.9

905.9

234.3

2,922.4

2,646.7

Total Expenses

626.4

426.0

490.5

890.2

390.0

2,823.1

Revenues less
Expenses

119.7

30.2

89.4

15.7

(155.7)

99.3

(109.1)

(23.8)

(54.5)

(15.7)

153.0

(50.1)

10.6

6.4

34.9

(0.0)

(2.7)

49.2

9.9
20.5

387.6
394.0

572.0
606.9

(0.2)
(0.2)

0.6
(2.1)

969.9
1,019.1

69.9
(27.6)
42.3

Transfers
Surplus/(Deficit)

Beginning Expendable Funds

Ending Expendable Funds

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 6

Statement of Activities to
Consolidated Budget Crosswalk
(in millions of dollars)

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 7

Bridging the GAAP

Financial data has to be manipulated (moved),
aggregated, or disaggregated for different purposes

Student Financial Aidmoves geographically from expenditure to

reduction from revenue (but only for tuition grants, not other types of
Aid)
Capital Asset Acquisition is a use of funds, but the Depreciation Charge
is what hits the external Income Statement
Fringe Benefit Burden expenditure vs. external Benefits pool payments
Internal Revenue/Expense and interfund transfers vs. the transfer that
show in GAAP reporting
Debt Service
Internal allocation of principal amortization as expenditure
Retirement of debt principal as Balance Sheet transaction

GAAP Fund Types vs. Fund Accounting Fund Types

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 8

Whats so funny about Peace, Love, &

Fund Accounting? *
FASB Reporting (GAAP)

UR

PR

TR

UR

Gifts &
End Inc

End
Princ

G&C

Fund Accounting
* With apologies to Elvis Costello and the Attractions

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 9

The Frustration
We have a disaggregated, discontinuous,
disorganized overall process.

Different units maintain their own models separately

No common thread; no continuous feedback or updating

Manual reconciliations between different views

How many times do we reinvent the wheel?

What were we thinking? (What were we thinking!)

With our hands full with Income Statement modeling, who has
time for Balance Sheet modeling?
The ERP systems we have do not facilitate this (no matter what
the sales team says)

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 10

The Disconnect
Unrestricted
Funds
Modeling
Tuition/Fees &
Enrollment
Forecasting

Endowment
Principal
Growth
Modeling
Detailed Budgets
entered by Units

Sponsored Activity
Forecasting

Financial Actuals
Consolidations

Capital Planning/Budgeting

Debt Service Planning

School submodels

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 11

Whats so funny about Peace, Love, &

Fund Accounting? *
FASB Reporting (GAAP)
PR

TR

UR

How do you plan, model, and report on both views

consistently, coherently, and meaningfully? And do it
without building your own system?
UR

Gifts &
End Inc

End
Princ

G&C

Fund Accounting
* With apologies to Elvis Costello and the Attractions

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 12

What is the vision?

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 13

3 Broad Components

Actual Revenues, Transfers, Expenditures, Assets, & Liabilities

Coming from the General Ledger (legacy, Oracle, SAP, Banner,
etc.)

Consolidation: Hyperion Financial Management

Detailed Budget
Coming from Hyperion Planning, Hyperion Pillar, Excel, etc.
Most often only for Income Statement items (Revenue & Expense)

Budgeting: Hyperion Planning

Long-Range Forecasting

Multiple year, what-if scenarios, aggregated data

Done most often in Excel
Usually not integrated into other systems
If multiple units are doing modeling, other units tend to be in the
dark

Modeling: Hyperion Strategic Finance

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 14

Using Hyperion Tools to Integrate

Hyperion
Planning

Detailed
Budgeting

Financial
Reporting

Different Levels
of Data Detail as
Relevant to the
Different Needs

Strategic
Modeling

Distributed and
Customizable
Modeling; Realtime Access

Hyperion
Financial
Management

Hyperion
Strategic
Finance
Automated
Data
Integration
Between the Systems

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 15

A Continuous, Integrated Process

As You Move Through
the Fiscal Year, Your
Comprehensive Model
Gets Updated

FALL
External
Financial
Statements

WINTER

Consolidated
Budget
SUMMER

SPRING

Each Offices
Model Gets
Data From and
Pushes Data To
the Other
Models

The
Crosswalk

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 16

HSF in Higher Education

Scenario Comparison
Early Forecast, Late Forecast, Budget, Projection, Actuals

What-If Modeling
Side-by-side comparisons
Sensitivity analysis

Models within models

Endowment Principal growth modelFeeds Endowment Income
Projection
Capital Asset growth modelFeeds Debt Service/Depreciation
Net Changes in AssetsFeed back to Balance Sheet
Using the same framework, each school/unit can set up their own
models, drivers, elements

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 17

Hyperion Strategic Finance

Create financial models for each school or division in Hyperion

Strategic Finance and consolidate them to a total for the university.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 18

Hyperion Strategic Finance

Modules can be created within each

financial model to forecast financial
statement items in detail.
The user can choose from a menu of
standard forecasting methods or create
customized drivers.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 19

Hyperion Strategic Finance

Reports can be created at varying levels of detail in each model.

Reports can pull Actuals, Budgets, and Different Forecast data
together for side-by-side comparison.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 20

Hyperion Strategic Finance

Each double-click
unveils an
additional layer of
detail.

Report across multiple schools or divisions and analyze individual drivers for
each.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 21

Hyperion Strategic Finance

Balance Sheet items, such as Endowments, can be forecast as well.

HSF will automatically generate a Cash Flow Statement based on the
Income Statement and Balance Sheet forecasts.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 22

Hyperion Strategic Finance

Model components flow back and forth between the Balance Sheet and Income Statement.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 23

Hyperion Strategic Finance

The Scenario Manager provides the flexibility to store multiple sets of assumptions for analysis.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 24

Hyperion Strategic Finance

Report the results or the financial impact of each scenario, or any combination of scenarios.

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 25

Whats In It For Us?

Higher Education strategic planning needs and demands are

becoming more complex
But the tools we relied on previously dont always adapt well

FASB and GASB reporting requirements are very different from the
way institutions really are managed
Buy vs. Build has often times turned into Buy and Build

ERP system implementations like Oracle and SAP have to be

customized up the wazoo, making day-to-day maintenance and
upgrades a royal pain
This model involves configuration only for higher education, rather
than code rewriting or front-end plug-ins

Hyperions focus is on Business Intelligence analysis, modeling, and

reporting

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 26

Questions, Discussion, Jokes

A Comprehensive Planning and Reporting Model for Higher Education: Hype

P. 27