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Deans’ Forum

Deans’ Forum. October 7, 2009. Agenda. B&F Overview and Strategic Framework Tim Slottow Highlights – Scope, Accomplishments, Challenges Hank Baier – Facilities and Operations Erik Lundberg – Investments Rowan Miranda – Finance Laura Patterson – Information and Technology Services

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Deans’ Forum

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  1. Deans’ Forum October 7, 2009

  2. Agenda • B&F Overview and Strategic Framework • Tim Slottow • Highlights – Scope, Accomplishments, Challenges • Hank Baier – Facilities and Operations • Erik Lundberg – Investments • Rowan Miranda – Finance • Laura Patterson – Information and Technology Services • Laurita Thomas – University Human Resources • Question/Answer

  3. B&F Fast Facts • Q. Approximately how many Human Subject Fee payments are made per year? • A. 10,000 • B. 50,000 • C. 120,000 • B. 500,000 • Q. How many tax forms do we file per year? • None – we are a non profit • 1 • C. 125 • D. 1,500 • Q. U-M is one of how many public universitiesto have a AAA credit rating from Moody’s and Standard & Poor’s? • A. 3 • B. 7 • C. 13 • 20 • Roughly what were the net assets of the University in 2009? • A. $12.9 billion • B. $4.2 billion • C. $8.7 billion • $8.0 billion • .

  4. The CFO and the UniversityWho is Shirley Smith?

  5. The Challenge

  6. Strategic Framework B&F Mission and Motto We partnerwith the University community to providethe technical, financial, physical, information and human resource infrastructure essentialto being one of the greatest public universities in the world. “WE MAKE BLUE GO”

  7. Strategic Framework B&F Vision • We will become a high-performance organization by: • Being known for our deep expertise (both technical and business) • Demonstrating our understanding of the University’s businesses • Serving as fiduciaries of the University assets (physical, financial, human, information and technology assets)

  8. Strategic Framework Goals and Initiatives • Three B&F Strategic Goals • Become the University’s PROVIDER of CHOICEfor the UM services we offer • Become the EMPLOYER of CHOICEfor high performing staff members and teams • Demonstrate BEST IN CLASS LEADERSHIP in managing University resources with respect to quality, cost, service and long term impact for the University • Internal implementation of major U-wide initiatives • Best Practices in Leadership and Management • Cost-Savings and Reinvestment • Top Ten Key Initiatives • Clear metrics • Updated annually to align with University goals • Transparent reporting and performance

  9. Provider of ChoiceMean Overall Customer Satisfaction Goal 1 *Statistically significant differences

  10. Goal 1 Provider of ChoiceAcademic Units Only *Statistically significant differences

  11. Goal 2 Employer of Choice *Statistically significant differences from 2005 to 2008

  12. Goal 2 Employer of Choice Red indicates dimensions with the highest impact on Job Satisfaction in 2008 *Statistically significant differences from 2005 to 2008

  13. Customer Survey and Employee Survey Scores Customer Satisfaction Scores Customer Satisfaction Score ‘09

  14. Goal 3 Best in Class Financial Leadership Target • Three years of budget savings • While maintaining employee satisfaction • And increasing customer satisfaction Budget 4-6% total savingsduringFY07-FY09 R Achieved

  15. Facilities and Operations Hank Baier Associate Vice President for Facilities and Operations

  16. A Thriving Campus! • Six-yearcampus growth: • Research expenditures  36% • Population  11% • Space  12% • General Fund space  10% • Facilities and Operations performance (six years): • Operations: • Utilities:  Fuel costs,  BTU/sf • Capital projects: $94,600,000 funds returned

  17. Architecture, Engineering and Construction

  18. Occupational Safety and Environmental Health

  19. Parking and Transportation

  20. Plant Operations

  21. Public Safety

  22. Operations Budget $68M $68M

  23. Utilities BudgetFY09 total expenditures: $111.7 million

  24. Utilities Total cost:  56.0% BTUs/SF  5.9%

  25. Capital Activity

  26. CapitalBudget

  27. FY10 and Long-term Challenges • Capital: • Benchmarking • Major projects (North Quad, C&W) • Utilities: • Planet Blue - 6% savings on pilot buildings • 30 buildings annually • Operations: • Custodial-OS1 • Facilities Maintenance-Work Control-Payroll • Office of Sustainability • Thriving campus

  28. Investment Office Erik Lundberg Chief Investment Officer

  29. June 30, 2009 Total Market Value = $7.5 billion University Financial Assets (a) ‘Other’ includes life income trusts, assets that cannot be commingled in the University's investment pools, uninvested cash balances and other reserves.

  30. Endowment Funds – End of Fiscal Year Market Value Endowment Growth

  31. Endowment Funds – End of Fiscal Year Market Value Endowment Growth Compound Average Annual Growth Rate 20 yrs: 14.2% 10 yrs: 9.1%

  32. LTP Investment PerformanceLong Term PerspectivePeriods Ending 6/30/09 • 5 Years(a) 10 Years(a) • Total LTP (estimates) 7.2% 8.9% • Major Markets • U.S. Stocks: S&P 500 -2.2% -2.2% • Non-U.S. Stocks: BMI ex-U.S. 3.7% 2.9% • Bonds: Lehman Aggregate 5.0% 6.0% • Endowment Universe(b) • Top Quartile 4.7% 5.3% • Median 3.5% 4.1% • Annualized returns. • Based on Cambridge Associates’ survey of endowments and foundations at about 130 colleges and universities.

  33. Investment StrategyLTP Actual Allocation vs. Model Portfolio June 30, 2009 Allocation Model Portfolio

  34. Goals and Challenges • Generatesufficient returns to • sustain spending and grow the endowment • in real terms over the long run. • Providesteady stream of distributions • to support University operations.

  35. Finance Rowan A. Miranda Associate Vice President for Finance

  36. Functional Responsibilities Transaction Processing Cash Disbursements Payroll Administration Accounts Payable Travel Expense Payroll Administration Revenue & Debt Cycle Billing & Collections Debt Issuance Grant Billing Accounting & External Reporting Fixed Assets/ Property Disposition Sponsored Research General Ledger Financial Reporting Compliance Management Planning and Business Transformation Tax Management Budgeting Budget Development for B&F (& support campus process) Capital Planning Tax Management Treasury Management Business Analysis Cash Management Business Analysis & Cost Accounting ComplianceManagement Internal Controls Business Transformation Efficiency & Effectiveness Initiatives Procurement Purchasing Requisition & PO Processing Negotiation & Contract Development Sourcing & Supplier Management 38

  37. Fast Facts • In FY09… • Payroll processed $230M+ in monthly payments • Property Disposition had 16,000+ sales transactions and returned $1.6M back to schools & units • Procurement Services processed 270,000+ purchase orders, 640,000+ invoices, and close to $2.5 billion in spending

  38. Fast Facts (continued) • In FY09… • Treasury issued 50,000 MCards to faculty, staff, and students • We administered and maintained over 85,000 unique chartfield fund, department, project, and program combinations • We tracked nearly 7,000 endowment funds with over $6 billion of market value

  39. Major Accomplishments • New payment process and initial pilot for human subject fee participants • Internal controls certification by all units • Employment, PCard, cash handling, and journal entry processes • Collaborative management with Investment Office of university’s liquidity situation • Project plan for implementation of revised travel and business hosting expense policyand pilot of Concur

  40. Budget Wins • Savings of $10M annually through Work Connections • Self-insurance through Veritas produced savings of $23M over the past six years • Additional indirect cost recovery of more than $25M over the next three yearsdue to new rate agreement • Continued growth of Strategic Supplier Program and university-wide contracts • JPMorgan Chase chosen asnew PCard vendor ($1M signing bonus)

  41. FY10 and Long-term Challenges • Support campus-wide administrative efficiency efforts • Benchmarkingof select administrative services • Finance • HR/Payroll • Procurement • Information Technology • Communications • Development • Sponsored Research • Student Services

  42. FY10 and Long-term Challenges • Procurement Strategic Partnering Program • Promote smarter buying in academic and administrative units by analyzing spending patterns and encouraging greater use of strategic contracts • Campus wide rollout of Concur • Federal Stimulus Act Compliance and Reporting • Support IT rationalization efforts especially on issues related to funding model/chargeback approach

  43. Information and Technology Services Laura Patterson Associate Vice President and Chief Information Officer

  44. Functional Responsibilities • Central Services • (Directory, eMail, Web, • Kerberos) • Campus Computing Sites • DataCenter Management • Voice & Data Networks • Video Streaming and Conferencing • Servers, Data Storage, & Protection • Security Services • University-wide Applications • Financial, HR, • Student Administration, • eResearch • DAC (replacement DART) • M-Reports • eMploy • Wolverine Access • Business Intelligence & • Data Management

  45. U-M IT Strategy

  46. U-M IT Strategy

  47. IT Rationalization Implement IT sourcing strategy that provides more competitive services for less money

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