Slides 9 3 prepare forecasts, variances and reconciliation

Prepare Forecasts, Variances and a Reconciliation Briefing Childcare Case Ft Riley Intermediate Cost Analysis and Management © What Makes a Good AAR Brief? • • • • What does your Senior Leader want to know? How should you present the information? What are your presentation pet peeves? What should you avoid? â Terminal Learning Objective Task: Prepare forecasts, variances and a reconciliation briefing •  Condition: You are training to become an ACE with access to ICAM course handouts, readings, and spreadsheet tools and awareness of Operational Environment (OE)/Contemporary Operational Environment (COE) variables and actors • Standard: with at least 80% accuracy • Use scenario information to prepare forecast, variance and reconciliation briefing © Child Care Centers Part of The Family and Morale, Welfare and Recreation Command (FMWRC or simply MWR) MWR’s Mission FMWRC, The Family and Morale, Welfare and Recreation Command serves the needs, interests and responsibilities of each individual in the Army community for as long as they are associated with the Army, no matter where they are, and provides the Army Family with the same quality of life afforded the society they protect MWR & Leadership • MWR is a comprehensive network of support and leisure services designed to enhance the lives of soldiers (active, Reserve, and Guard), their families, civilian employees, military retirees and other eligible participants • Over 37,000 MWR employees worldwide • A 2-star general leads the FMWRC MWR Program Categories Categories A - Mission Sustaining Activities (Appropriated Funds APF) B - Basic Community Support Activities (Combination - APF/NAF) C - Business Activities (User paid - Non Appropriated Funds) Examples Sports, Libraries Child Care centers, youth programs Golf courses, clubs, bowling, travel Child Development Center at Ft Riley • Part of Community Activities Directorate (Morale, Welfare, Recreation) that reports to Garrison Commander • Looks at cost in two categories • Appropriated funds are supplied from Congress • Non appropriated funds are received from user fees that parents pay based on rank • The following brief was presented by the center supervisor to the Garrison Commander © DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER CATEGORY OF DEC 98 JAN 99 FEB 99 EXPENSE LABOR PLAN ACTUAL VARIANCE PLAN ACTUAL VARIANCE PLAN ACTUAL VARIANCE APF Base Pay $46,061 $41,874 $4,187 $52,222 $55,903 Benefits $12,659 $12,150 $509 $12,150 $12,150 Overtime Awards Special Payment $6,659 $0 $6,659 $6,659 NAF Base Pay $43,955 $45,538 ($1,583) $58,689 $46,950 Benefits $8,794 $7,553 $1,241 $11,526 $9,311 Overtime Awards Military Labor OTHER OPERATING EXPENSES APF Travel Supplies $4,213 $3,457 $756 $4,500 $9,925 Equipment Contracts Rents NAF Travel Supplies $1,000 $782 $218 $1,000 $1,000 Equipment Contracts Other $1,553 $1,553 $0 $1,553 $1,553 COGS TOTAL COSTS $124,894 $112,907 $9,505 $135,479 $136,792 INCOME Reimbursable Revenue $58,957 $42,800 ($16,157) $60,850 $59,200 NAF NIBD $3,655 -$12,626 ($8,971) -$11,918 $386 DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER CATEGORY OF DEC 98 JAN 99 FEB 99 EXPENSE LABOR PLAN ACTUAL VARIANCE PLAN ACTUAL VARIANCE PLAN ACTUAL VARIANCE APF Base Pay $46,061 $41,874 $4,187 $52,222 $55,903 Benefits $12,659 $12,150 $509 $12,150 $12,150 Overtime Awards Special Payment $6,659 $0 $6,659 $6,659 NAF Base Pay $43,955 $45,538 ($1,583) $58,689 $46,950 Benefits $8,794 $7,553 $1,241 $11,526 $9,311 Overtime Awards Military Labor OTHER OPERATING EXPENSES APF Travel Supplies $4,213 $3,457 $756 $4,500 $9,925 Equipment Contracts Rents NAF Travel Supplies $1,000 $782 $218 $1,000 $1,000 Equipment Contracts Other $1,553 $1,553 $0 $1,553 $1,553 COGS TOTAL COSTS $124,894 $112,907 $11,987 $148,299 $136,792 INCOME Reimbursable 10 Revenue $58,957 $42,800 ($16,157) $60,850 $59,200 NAF NIBD $3,655 -$12,626 ($16,281) -$11,918 $386 Note these math errors Groups 5&6 Activity • Simplify Data • Fewer Categories, Fewer Numbers • Groups 5&6: Prepare one page that shows all the relevant information of the original brief plus the variances of the Jan Plan to Dec Actual and Feb Plan to Jan Plan Highlight issues raised © 16 Instructor Materials © 17 Group Graph 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 Total Cost Revenue DEC ACT JAN PLAN © FEB PLAN 18 Group Analysis Jan Plan Feb Plan Var Jan Appropriated Funds Pay and Benefits Special Payment Supplies Total APF Cost 64.4 6.7 4.5 75.5 68.1 0.0 9.9 78.0 (3.7) 6.7 (5.4) (2.5) Non Appropriated Funds Revenue Pay and Benefits Supplies Other Total NAF Cost Net Income 60.9 70.2 1.0 1.6 72.8 -11.9 59.2 56.3 1.0 1.6 58.9 0.4 (1.7) 13.9 0.0 0.0 13.9 12.3 © 19 Group Analysis Dec Actual Jan Plan Var Dec Feb Plan Var Dec Appropriated Funds Pay and Benefits Special Payment Supplies Total APF Cost 54.1 3.5 57.6 64.4 6.7 4.5 75.5 (10.3) (6.7) (1.0) (17.9) 68.1 0.0 9.9 78.0 (14.0) 0.0 (6.4) (20.4) Non Appropriated Funds Revenue Pay and Benefits Supplies Other Total NAF Cost Net Income 42.8 53.1 0.8 1.6 55.4 -12.6 60.9 70.2 1.0 1.6 72.8 -11.9 18.1 (17.1) (0.2) 0.0 (17.4) 0.7 59.2 56.3 1.0 1.6 58.9 0.4 16.4 (3.2) (0.2) 0.0 (3.5) 13.0 © 20 Group Analysis Dec Plan Dec Actual Delta Plan Appropriated Funds Pay and Benefits Special Payment Supplies Total APF Cost 58.8 6.7 4.2 69.6 54.1 3.5 57.6 4.7 6.7 0.8 12.1 Non Appropriated Funds Revenue Pay and Benefits Supplies Other Total NAF Cost Net Income 59.0 52.8 1.0 1.6 55.4 3.7 42.8 53.1 0.8 1.6 55.4 -12.6 (16.2) (0.3) 0.2 0.0 0.0 (16.3) © 21 DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER DEC PLAN ACT JAN VAR FEB PLAN VAR DEC 52.2 (10.3) 12.2 0.0 6.7 (6.7) 4.5 (1.0) 75.5 (18.1) APF Base Pay Benefits Special Payment Supplies TOTAL APF COST 46.1 12.7 6.7 4.2 69.6 41.9 12.2 0.0 3.5 57.5 NAF Revenue Base Pay Benefits Supplies Other NIBD 59.0 44.0 8.8 1.0 1.6 3.7 42.8 (16.2) 45.5 (1.6) 7.6 1.2 0.8 0.2 1.6 0.0 -12.6 (16.3) 4.2 0.5 6.7 0.8 12.1 © 60.9 58.7 11.5 1.0 1.6 -11.9 18.1 (13.2) (4.0) (0.2) 0.0 0.7 PLAN VAR JAN 55.9 (3.7) 12.2 0.0 6.7 9.9 (5.4) 78.0 (2.4) 59.2 47.0 9.3 1.0 1.6 0.4 (1.7) 11.7 2.2 0.0 0.0 12.3 22 What’s the Story? • Why is APF so favorable in December? • Can we annualize and reprogram? • Story: • $6.7K special payment delayed until Jan • $5.0K new hire delayed until Jan • Conclusion: cannot annualize and reprogram © 23 DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER DEC PLAN ACT JAN VAR FEB PLAN VAR DEC 52.2 (10.3) 12.2 0.0 6.7 (6.7) 4.5 (1.0) 75.5 (18.1) APF Base Pay Benefits Special Payment Supplies TOTAL APF COST 46.1 12.7 6.7 4.2 69.6 41.9 12.2 0.0 3.5 57.5 NAF Revenue Base Pay Benefits Supplies Other NIBD 59.0 44.0 8.8 1.0 1.6 3.7 42.8 (16.2) 45.5 (1.6) 7.6 1.2 0.8 0.2 1.6 0.0 -12.6 (16.3) 4.2 0.5 6.7 0.8 12.1 © 60.9 58.7 11.5 1.0 1.6 -11.9 18.1 (13.2) (4.0) (0.2) 0.0 0.7 PLAN VAR JAN 55.9 (3.7) 12.2 0.0 6.7 9.9 (5.4) 78.0 (2.4) 59.2 47.0 9.3 1.0 1.6 0.4 (1.7) 11.7 2.2 0.0 0.0 12.3 24 What’s the Story? • Why was revenue/profit down $16K? • Story: • ($10K) December slow month for day care • Why was this a surprise? • Why didn’t we anticipate and reduce staffing? • ($6k) Increased proportion of low rates • Will this annualize and create a major problem for the year? © 25 DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER DEC PLAN ACT JAN VAR FEB PLAN VAR DEC 52.2 (10.3) 12.2 0.0 6.7 (6.7) 4.5 (1.0) 75.5 (18.1) APF Base Pay Benefits Special Payment Supplies TOTAL APF COST 46.1 12.7 6.7 4.2 69.6 41.9 12.2 0.0 3.5 57.5 NAF Revenue Base Pay Benefits Supplies Other NIBD 59.0 44.0 8.8 1.0 1.6 3.7 42.8 (16.2) 45.5 (1.6) 7.6 1.2 0.8 0.2 1.6 0.0 -12.6 (16.3) 4.2 0.5 6.7 0.8 12.1 © 60.9 58.7 11.5 1.0 1.6 -11.9 18.1 (13.2) (4.0) (0.2) 0.0 0.7 PLAN VAR JAN 55.9 (3.7) 12.2 0.0 6.7 9.9 (5.4) 78.0 (2.4) 59.2 47.0 9.3 1.0 1.6 0.4 (1.7) 11.7 2.2 0.0 0.0 12.3 26 What’s the Story? • Why are we adding so much payroll? • Is this an opportunity? • Can we avoid or defer? • Can we shift people from other areas where their job is no longer needed? • Story • Unknown Action item for follow up â 27 DIRECTORATE OF COMMUNITY ACTIVITIES Cost Based Management Review Organizational Element: CHILD DEVELOPMENT CENTER DEC PLAN ACT JAN VAR FEB PLAN VAR DEC 52.2 (10.3) 12.2 0.0 6.7 (6.7) 4.5 (1.0) 75.5 (18.1) APF Base Pay Benefits Special Payment Supplies TOTAL APF COST 46.1 12.7 6.7 4.2 69.6 41.9 12.2 0.0 3.5 57.5 NAF Revenue Base Pay Benefits Supplies Other NIBD 59.0 44.0 8.8 1.0 1.6 3.7 42.8 (16.2) 45.5 (1.6) 7.6 1.2 0.8 0.2 1.6 0.0 -12.6 (16.3) 4.2 0.5 6.7 0.8 12.1 © 60.9 58.7 11.5 1.0 1.6 -11.9 18.1 (13.2) (4.0) (0.2) 0.0 0.7 PLAN VAR JAN 55.9 (3.7) 12.2 0.0 6.7 9.9 (5.4) 78.0 (2.4) 59.2 47.0 9.3 1.0 1.6 0.4 (1.7) 11.7 2.2 0.0 0.0 12.3 28 What’s the Story? • What’s the risk of cost happening and revenue not happening? • Does revenue rate problem go away? • Why are we adding payroll? • Story • Unknown • Action items taken to review rates and consider increase 29 © Reconciliation December Actual Plan Variance Revenue Cost 42.8 112.9 59.0 124.9 (16.2) 12.0 Explanation Low Attendance (10.0) -Low Rates (6.2) -Delayed Hire -5.0 Delayed Special Payment -6.9 All Other -.1 © 30 ... $52,222 $55 ,90 3 Benefits $12,6 59 $12,150 $5 09 $12,150 $12,150 Overtime Awards Special Payment $6,6 59 $0 $6,6 59 $6,6 59 NAF Base Pay $ 43 ,95 5 $45, 538 ($1,5 83) $58,6 89 $46 ,95 0 Benefits $8, 794 $7,5 53 $1,241... $1,5 53 $1,5 53 $0 $1,5 53 $1,5 53 COGS TOTAL COSTS $124, 894 $112 ,90 7 $9, 505 $ 135 ,4 79 $ 136 , 792 INCOME Reimbursable Revenue $58 ,95 7 $42,800 ($16,157) $60,850 $ 59, 200 NAF NIBD $3, 655 -$12,626 ($8 ,97 1)... $52,222 $55 ,90 3 Benefits $12,6 59 $12,150 $5 09 $12,150 $12,150 Overtime Awards Special Payment $6,6 59 $0 $6,6 59 $6,6 59 NAF Base Pay $ 43 ,95 5 $45, 538 ($1,5 83) $58,6 89 $46 ,95 0 Benefits $8, 794 $7,5 53 $1,241