2018-19 Closeout Kickoff Office of State Budget & Management May 15, 2019

1. 2018-19 Closeout Kickoff Office of State Budget & ManagementMay 15, 2019 Ann Anderson Sarah GrimsrudJames Robinson Dana GilloolyAbby Gac

2. Discussion Topics Streamlined Carryforward Process Operating Closeout Capital Closeout FAQs OSBM Systems Analysis Budget Execution Improvements for FY 2019-20

3. Streamlined Carryforward Process • Timeline • May 13 – Deadline to encumber funds • June 14 – Preliminary carryforward requests from limited agencies: • DHHS • DPI • UNC System • July 1 – Final carryforward requests submitted to OSBM • Late July– OSBM determinations complete and agencies/universities are notified • Balanced Budget - Carryforward approvals depend on statewide cash availability after all agencies are closed

4. Streamlined Carryforward Process • New, Simplified Template • Highlighted cells identify where data is entered 

5. Streamlined Carryforward Process • Dropdown menus reduce keying and standardize data • Only one budget code per tab

6. Streamlined Carryforward • Agency name will auto-populate • As you enter data, relevant cells will highlight

7. Streamlined Carryforward Process

8. Streamlined Carryforward Process

9. Streamlined Carryforward Process Statutory requirement citations are needed when Category A is chosen

10. Streamlined Carryforward Process Row 24 will sum all requests

11. Streamlined Carryforward Process If submitting for more than one budget code, create a duplicate tab in the same workbook

12. Streamlined Carryforward Process • Guidelines for Encumbrance Carryforward Requests (Category C) • Only allowed for items in which funding is not available next fiscal year • POs less than $5k should not be requested for carryforward • Individual POs of $5k<$100k should be rolled together into one request • Individual POs $100,000 and greater must be requested as separate line items • Encumbrances for grants awarded to third parties should be requested separately regardless of amount • Items previously approved for carryforward are not eligible (unless OSBM exception) • Retain backup documentation for OSBM compliance checks and audit purposes

13. Streamlined Carryforward Process

14. Operating Closeout • Closeout Certification • Located at the end of the OSBM Closeout Memo • Completed and signed by agency CFO or Budget Director • Certifies that the June 29 agency budget complies with OSBM guidelines

15. Operating Closeout • Closeout Job Aid • Located on OSBM’s website • Details the budget review process and OSBM guidelines • Includes budget review instructions and location of relevant IBIS budget reports

16. Capital Closeout DATES TO REMEMBER:  May 30 – Budget Code Closure Requests Due June 3 – Last COPs/Bond Requisition June 6– All June Capital Allotments Due June 19 – All Capital Budget Revisions Due June 20– Capital Budget Close • Capital Closeout – Occurs BEFORE Operating Close Out • New Capital Budget Code Closure Job Aid  • Step-by-step instructions for identifying budget codes that should be closed • New Budget Code Closure Request Form • Linked within the job aid • Fillable PDF form

17. Capital Closeout • Identifying & Closing Inactive Budget Codes • Revise Budget Codes to Reflect Actual Project Spending (Unallotments & Type 11 or 12 Revisions) • Submit Request to Close Prepared Budget Codes by May 30 • Agencies MUST submit list to OSC to close the code in NCAS

18. Capital Closeout Addressing Negative Budgets & Over-expended Account Lines • Negative Allotment Report - GDAC/DSS • BD725_Curr_Neg_Allot • Correct by submitting IBIS allotment request by June 6 • BD725 Reconciliation - GDAC/DSS • Identify any over expended accounts, funds, and budget codes • Correct by submitting IBIS budget revisions by June 19

19. FAQs Why is there a new annualized column on budget revisions? • Activates for recurring revisions with an effective date other than 07/01/XX. • This data will be pulled into IBIS in the 2019-21 biennium. • If left blank, no budget will be copied into the new fiscal year. • IBIS technical staff is monitoring prior to loading into the new fiscal year.

20. FAQs How do I close out old operating funds and/or budget codes? • Process in development – will be similar to CI close out process • OSBM execution analysts will work with agencies • Implementation in FY 2019-2020

21. FAQs When do I mark a revision as using Lapsed Salary? • When you move funds from a personal services type account (531XXX) to any other allowable operating expense (including another 531XXX account) • See Budget Manual section 3.6.7 Lapsed Salary Revisions for further detail

22. FAQs Who do I contact in OSBM with my questions? • Handout on the back of the agenda • Staff directory at www.osbm.nc.gov

23. BREAK Go stretch • Introduce yourself to your peers or budget analyst

24. Budget Execution Reform Timeline June 2018 OSBM Reorganization Simplified Closeout Process Streamlined Capital Budgeting Procedures July 2018 Base Budget Improvements August 2018 Hurricane Florence Damage and Needs Assessment September 2018 Budget Execution Systems Analysis Completed March 2019

25. Budget Execution Reform – Systems Analysis • Started Work in Fall 2018 • “Systems Analysis” - Help agencies maximize the efficiency and effectiveness of state services through Systems Thinking • Systems Analysis – What is a System? • Derived from Greek word “Systema”, meaning an organized relationship between any set of components to achieve some common cause or objective. • A system is “an orderly grouping of interdependent components linked together according to a plan to achieve a specific goal.” • In OSBM, think of Budget Execution as a system.

26. OSBM Systems Analysis • Budget Revision Review Process Identified as Bottleneck • Next Step was to Create a Process Map for Operating Budget Revisions

27. OSBM Systems Analysis

28. OSBM Systems Analysis • Goals of Systems Analysis Reforms • Reduce Time Spent on Non-Value Add Transactions • Reduce Risk of Noncompliance with Budget Act • Implementation Possible by July 1 • OSBM Budget Execution Analysts Asked to Identify Problems that Cause Significant Time Investment • Analysts Rated Each Problem: • Degree of Time Saved if Problem Fixed • Risk to Oversight if Process is Changed

29. OSBM Systems Analysis Verify Authority & Sufficient Justification Realignments for Programs with Multiple Funds Increasing Revisions for Minimal Dollar Amount Increasing Time Intensity

30. Budget Execution Improvements for FY 2019-20 • Verify Authority & Sufficient Justification • Develop Standard Format for Justifications • Compile List of Frequently Used Statutes and Session Laws for Budget Revisions • Develop and Hold Training Sessions • Anticipated Benefits: • Fewer Returned Revisions, Questions from OSBM • OSBM’s Required Information More Predictable and Consistent Across Analysts & Agencies • Reduce Time Spent on Reviews • Expedite Approvals

31. Budget Execution Improvements for FY 2019-20 • Revisions for Minimal Dollar Amount • Delegate Authority for Small Dollar Receipt Increases to Campuses and Agencies • Examine Historical IBIS Data to Set Threshold • Develop Policies, Monitoring & Compliance Plan • Anticipated Benefits: • Reduce OSBM Time Spent on Low-Risk, Low-Value Transactions • Expedite Approvals for Agencies

32. Budget Execution Improvements for FY 2019-20 • Realignments for Programs with Multiple Funds • Applicable to State Agencies Subject to State Budget Act Restrictions • OSBM to Delegate Authority to Realign Budget Across Funds that are One Program • Develop Policies, Monitoring & Compliance Plan • Anticipated Benefits: • Significant Reduction in Number of Budget Revision Reviews Where OSBM Provides No Value • Approvals Expedited for Agencies

33. Capital Execution Improvements for FY 2019-20 • New IBIS Budget & Allotment Summary Report • Provides Reliable Data Source for Reconciliations, Project Award Approvals, Project Management • Anticipated Benefits: • Eliminates Dual Entry in OSBM Access Database • Significantly Reduces Time Researching Errors

34. Capital Execution Improvements for FY 2019-20 • New IBIS Budget Transaction Report • Provides Reliable Data Source for Reconciliations, Project Award Approvals, Project Management • Anticipated Benefits: • Significantly Reduces Time • Researching Errors • Complete Historical Record • of IBIS Actions on a Specific • Fund Code/Project

35. Capital Execution Improvements for FY 2019-20 • Batch Creation of New Fund Codes in IBIS • Template for Agency/University Use at the Onset of the New Fiscal Year • Batch Approval by OSBM & OSC – Uploaded to IBIS • Anticipated Benefits: • Significantly Reduces Time Spent Creating, Reviewing, and Approving Fund Code Requests at the Beginning of the Fiscal Year

36. Capital Execution Improvements for FY 2019-20 • New COPs/Bonds Requisition Procedure • OSBM In Partnership with OSC & DST • Applicable to Debt Funds Requisitioned Twice a Month Anticipated Benefits: • Reduce Agency Transactions to Request Requisitions and Corresponding Allotments • Reduce OSBM Duplication of entries into Access Database • Approvals Expedited for Agencies/Universities

37. Budget & Capital Execution Reforms – Upcoming Changes July 2019 Phase 1 Reforms Implemented Develop and Track Measures Begin Phase 2 Budget Revision Reforms Agency/University Focus Groups & Survey Prioritize Improvements that Result in Efficiencies for Agencies and OSBM Target Improvements with High Impacts, Longer Implementation September 2019

38. Budget & Capital Execution – Long Term Vision • Strategic Budget Management • Develop Measures for Statewide Budget Execution • Use Data, Analysis, and Visualization Tools to Address Issues Proactively • Build Budget Execution Dashboards to Aid Decision-Making • Quarterly Briefings with Executive Leadership • Budget Status Report (Dashboards, Measures) • Emerging Issues Affecting Current Year Budget

39. Questions www.osbm.nc.gov Questions?