Financial Performance Review Committee

Background

In November 2002, the University administration reported to the Board’s Ad-Hoc Budget Process Committee, its creation of a Financial Performance Review Committee (FPRC).  This was in response to concerns about financial activities outside of the General Fund, in particular in Auxiliary Fund units. The creation of the FPRC was supported by Plante & Moran, PLLC, in their capacity as consultants to the Board on budget and financial issues.

The Financial Performance Review Committee has been functioning since the beginning of the calendar year 2003. 

The FPRC reports to the Senior Vice President for Finance and Administration and brings information, concerns and recommendations for improvements from the FPRC to the University’s senior management for action.

1. Purpose

The Financial Performance Review Committee (FPRC) is tasked with the ongoing, independent evaluation of the financial operations of the University’s non-General Fund units, with a primary focus on Auxiliary Enterprises and other selected units. The Committee serves as an advisory and oversight body that supports institutional financial integrity and promotes financial accountability.  The FPRC will identify, report on, and recommend improvements in financial practices, accounting integrity, and operational efficiencies to senior university leadership. Reviews by the FPRC are not intended to rise to the level of an internal audit.

2. Reporting Structure

• Reports directly to the Sr. Vice President for Finance and Administration.
• Brings forward findings, concerns, and recommendations for corrective or strategic actions to University Senior Management.

3. Committee Membership

Consists of senior finance and administration staff, including:

• Associate VP, Budget and Financial Planning (chair)
• Director, Budget and Financial Planning
• Associate VP, Finance & Administration
• Associate VP & Controller
• Director, Accounting Services
• Sr. Business and Operations Manager, F&A

4. Key Areas of Focus

Auxiliary Enterprise Financial Performance and Reporting

The FPRC shall review the financial performance of designated Auxiliary Enterprise units through quarterly reporting and biannual performance meetings. Responsibilities include:

• Reviewing and accepting quarterly financial reports submitted by each unit, signed by the responsible Director and Vice President (or President).
• Identifying and requesting clarification or additional information as necessary.
• Conducting biannual meetings (Spring and Fall) with each unit to evaluate:
• Prior year financial performance, comparing budget to actual data
• Current year financial performance, comparing budget to actual data and understanding major variances from budget plan and any emerging concerns
• Year-end projections and upcoming budget assumptions

• Units reviewed include, but are not limited to:
• Intercollegiate Athletics, University Housing, Meadow Brook Estate, Oakland Center, Golf and Learning Center, Lowry Center for Early Childhood Education, School of Medicine, ABA Clinic, OU Incubator

Other Reviewed Units Reporting

• Monitor financial reporting and management practices of Grants Office operations.
• Apply the same reporting and review protocols as for Auxiliary Enterprises.

Hiring Process for Financial Positions

The FPRC shall participate in and formally endorse the hiring of financial personnel across the University. Specific responsibilities include:

• Ensuring Central Finance representation on all hiring committees for financial and budgetary positions external to Central Finance.
• Requiring formal endorsement from Central Finance before an offer of employment is extended.
• Ensuring that candidates are appropriately qualified, thereby enhancing organizational financial performance and reducing institutional risk.

Objective: To enhance financial stewardship and ensure personnel are positioned for success by aligning skills with position requirements.

5. Responsibilities and Activities

• Review & Evaluation: Quarterly review of financial reports submitted; request clarification as needed.
• Performance Meetings: Meet biannually with reporting units to provide guidance, evaluate financial projections, and assess fiscal assumptions and performance trends.
• Advisory Role: Recommend appropriate corrective or strategic measures in response to identified financial risks or efficiencies.
• Reporting: Timely communication of findings regarding any financial issues, risks, and operational observations to senior management.

6. Objectives

The FPRC’s operational objectives include:

• Ensuring timely, accurate, and transparent financial reporting across reviewed units.
• Supporting the development of realistic financial projections and sound budgeting practices.
• Enhancing institutional awareness of budgetary and expenditure controls.
• Promoting consistent application of financial best practices and regulatory standards.
• Facilitating the professional development and strategic placement of finance personnel.

7. Mandate

The FPRC is charged with providing periodic, independent assessments of the financial operations of selected University units, particularly those outside of the General Fund. The Committee is empowered to:

• Examine financial trends, practices, and risks that may adversely affect the University.
• Advise individual units and University leadership on necessary corrective actions.
• Recommend improvements in both operational financial practices and accounting/reporting standards.
• Ensure alignment between institutional financial practices and the University’s long-term fiscal health and governance principles.