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FY 2020 OPERATING AND CAPITAL BUDGET

Approved by the Finance Committee
April 18, 2019

Approved by the Full Board
May 9, 2019

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATING AND CAPITAL BUDGET
KEY HIGHLIGHTS AND GENERAL ASSUMPTIONS

Overview

The FY 2020 Operating and Capital Budget has been modeled to support the Center’s strategic plan, and includes incremental revenue and expenses, and the budget complements the overall goal for the fiscal year: to increase the volume of business generated, and to produce higher quality activities offered.

New Bookings and Revenue are both budgeted to increase in FY 2020, and the Center is budgeting a positive Net Operating Gain of $354,681.

New Bookings

The Center is forecasting completion of the current fiscal year (2019) at $5,530,800 in New Bookings, down from the $6,185,963 booked in the prior year. For FY 2020, the Center is budgeting Total New Bookings of $7,076,500.

Backlog

Project backlog carried into FY 2020 is projected to total $2,155,872. Recent comparisons:

  • Backlog carried into FY 2019 $3,424,597 (actual)
  • Backlog carried into FY 2018 $2,099,601 (actual)

Revenue

Net Operating Revenue is projected to increase from $6,183,985 in FY 2019 to $6,679,385 in FY 2020, an increase of $495,399 or 8.0%. Project revenue is budgeted to increase by 8.2%

Expenses

As has been the practice in past years, the expense portion of the budget has been modeled using current year expenditures as a baseline and adjusting where needed for incremental expenditures or savings planned for next year.

Total Expenses at the Center are projected to increase from FY 2019 to FY 2020 by $469,881, or 8.0%. A breakdown of the key items contributing to the change in cost and their approximate financial impact follows:

$106,767 increase in Salaries and Wages Expense

  • Replacement of one Director, Business Development
  • Projected merit increases of 2.5% (equal to the rate EMC is budgeting for FY 2020)
  • A bonus pool of $25,000 has been included in the budget

$48,140 increase in Employee Benefits Expense

  • Costs will increase in tandem with the increased salaries and wages expense outlined above
  • The EMC benefits rate is anticipated to rise 2% in most categories in FY 2020, but a 5% increase is planned for Health Insurance.

$540 increase in Supplies Expense

  • Minor cost increase in Programs

$140,398 increase in Purchased Services Expense

  • Increase in expense categories such as honorarium, audience generation, printing, etc.; a direct result of the Center producing a higher volume of projects and more revenue.

$78,165 increase in Professional Fees Expense

  • $30,000 Recruiter’s fee for Director, Business Development
  • $48,000 increase in expense categories such as content tied to medical editors and webcast hosting services, etc.; all expenses directly tied to the movement in project volume.

$12,674 increase in Depreciation Expense

  • Three capital equipment items with a useful life of 5 years are planned. The Capital Budget for FY 2020 is $67,000 (see below).

$466 increase in Insurance Expense. (nothing significant to report here)

$767 increase in Utilities (Telephone) Expense. (nothing significant to report here)

$0 increase in Rent/Lease, Facility Expense.

  • No rent increase is scheduled for FY 2020

$40,110 increase in Outside Training Expense, Travel & Meals

  • Increase is a direct result of the Center producing higher volume of business, and continuation of business cultivation that includes the Scientific Director, Oncology attending major oncology conferences.

$1,411 increase in Board of Directors Expense. (nothing significant to report here)

$34,510 increase in Other Expense.

  • Assumes increased costs based on higher volume of business.

Net Operating Gain / (Loss)

The Center is projecting to close FY 2019 with a net operating gain of $329,161 and has budgeted $354,681 in FY 2020 (an increase of 7.8%)

Capital Expenditures

Capital equipment needs for FY 2020 total $67,000 as follows:

  • Conference Room Technology
$62,000
  • Network Server
$ 3,000
  • Server UPS/Backup
$ 2,000
Total $67,000

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATING BUDGET
KEY FINANCIAL & OPERATIONAL INDICATORS

 

FY 2018
Actual
FY 2019
Projected
FY 2020
Budget
FINANCIAL
1. Net Operating Revenue 5,334,113 6,183,985 6,679,385
2. Operating Gain / (Loss) 128,019 329,161 354,681
3. Gross Profit/(Loss) As a Percent of Net 71.8% 69.9% 70.5%
Operating Revenue
4. Operating Gain/(Loss) As a Percent of Net 2.4% 5.3% 5.3%
Operating Revenue
5. Accounts Receivable Greater Than 60 Days 1.9% 1.5% 1.5%
6. New Bookings 6,185,963 5,530,800 7,076,500
OPERATIONAL
7. Payer Mix (Revenue)
Project 4,874,116 5,717,456 6,186,185
Routine Business 13,761 12,319 13,200
Intercompany 280,248 294,015 313,000
Restricted Funds & Endowment Earnings 55,935 31,763 25,000
Interest 110,054 128,432 142,000
8. Total Staff Positions (FTEs) 18.00 17.00 18.00
9. Net Operating Revenue Per Staff Position (FTE) 296,340 363,764 371,077
10. Net Operating Income Per Staff Position (FTE) 7,112 19,362 19,704
11. Average Revenue per Month 444,509 515,332 556,615

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATION BUDGET
STATEMENT OF REVENUE AND EXPENSE

FY 2018
Actual
FY 2019
Budget
FY 2019
Actual
YTD Feb
FY 2019
Projected
Mar-Jun
FY 2019
Projected
Total
FY 2020
Budget
(Un)/Fav Change
FY20 vs. FY19
$ %
NEW BOOKINGS 6,185,963 6,896,500 2,635,233 2,895,567 5,530,800 7,076,500 1,545,700 27.9%
REVENUE
Total Project Revenue 4,874,116 6,343,168  3,707,898 2,009,558 5,717,456 6,186,185 468,729 8.2%
Routine Business Revenue
Registration Fees (Dental Ed, Grand Rounds) 13,761 12,850 8,036 4,283 12,319 13,200 881 7.2%
Underwriting & Exhibitor Fees 0.0%
Total Routine Business Revenue 13,761 12,850 8,036 4,283 12,319 13,200 881 7.2%
Intercompany Revenue
EMC CME (Grand Rds,Tumor Bd, Dental Ed) 280,248  276,876 195,390 98,625 294,015 313,000 18,984 6.5%
Other EMC Conference Support 19,000 0.0%
Total Intercompany Revenue 280,248 295,876 195,390 98,625 294,015 313,000 18,984 6.5%
Other Revenue
Restricted Funds, Endowments & Other 55,935 15,000 30,097 1,667 31,763 25,000 (6,763) -21.3%
Interest Income, net of Investment Fees 110,054 82,000 101,098 27,333 128,432 142,000 13,568 10.6%
Total Other Revenue 165,989 97,000 131,195 29,000 160,195 167,000 6,805 4.2%
 Net Operating Revenue 5,334,113 6,748,893  4,042,519 2,141,466 6,183,985  6,679,385 495,399 8.0%
EXPENSES
Salaries and Wages 2,072,756 2,433,681  1,483,659 732,330 2,215,989  2,322,756 (106,767) -4.8%
Employee Benefits 684,146 736,103 404,817 210,173 614,990 663,130 (48,140) -7.8%
Supplies 19,225 25,065 15,579 10,406 25,985 26,525 (540) -2.1%
Purchased Services 1,001,494 1,316,822 785,598 513,194 1,298,792 1,439,190 (140,398) -10.8%
Professional Fees 785,433 910,797 547,674 359,589 907,264 985,428 (78,165) -8.6%
Intercompany Charges 192,424 212,820 128,356 78,531 206,888 212,820 (5,933) -2.9%
Depreciation 36,998 43,744 4,716 2,422 7,138 19,812 (12,674) -177.6%
Insurance 17,980 19,000 13,023 6,512 19,535 20,000 (466) -2.4%
Utilities (Telephone) 18,357 28,491 13,023 6,380 19,403 20,170 (767) -4.0%
Rent/Lease, Facility 163,080 179,388 112,280 56,140  168,421 168,421 0.0%
Travel & Outside Training 97,590 162,389 135,622 81,617 217,239 257,349 (40,110) -18.5%
Board of Directors Expense 17,736 17,500 12,471 3,118 15,589 17,000 (1,411) -9.1%
Other Expenses 98,876 181,843 96,889 40,705 137,593 172,103 (34,510) -25.1%
 Total Expenses 5,206,094 6,267,643  3,753,707 2,101,116 5,854,824  6,324,704 (469,881) -8.0%
NET OPERATING GAIN / (LOSS) 128,019 481,250 288,811 40,350 329,161 354,681 25,519 7.8%
Net Operating Gain/(Loss) as percent of revenue 2.4% 7.1% 7.1% 1.9% 5.3% 5.3%
L&M on Project Business 74.1% 69.8% 71.8% 66.6% 69.9% 70.5%
Full Time Equivalents (FTEs) 19.20 20.20 18.00 17.00 17.00 18.00

Supplies: copy machine expense, minor equipment, office supplies
Purchased Services: honorarium, audience generation, printing, recruiting agency costs, repairs & maintenance
Professional Fees: freelance and consulting, audit and tax preparation
Intercompany Charges:  accounting, payroll, human resources, telephone, mail room, legal/risk mgmt
Travel & Outside Training:  airfare, hotel, meals, conference registration fees
Board of Director Expense:  board member travel costs to attend meetings, postage, BOD meeting catering
Other expense:  license & fees, dues & subscriptions, recruiting and moving expense, postage.

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATION BUDGET
BOOKINGS DETAIL AND COMPARISONS

FY 2018
Budget
FY 2018
Actual
FY 2019
Budget
FY 2019
YTD Feb
Actual
FY 2019
Mar-Jun
Projected
FY 2019
Projected
Proposed
FY 2020
Budget
John  1,290,000  1,232,562  1,200,000  1,000,100     450,200  1,450,300  1,200,000
Margot  1,612,500  1,235,000  1,700,000     500,000     865,000  1,365,000  1,500,000
Kristen  1,612,500  1,976,250  1,500,000       75,000  1,425,000  1,500,000  2,000,000
Judy/TBD  1,612,500     900,000  1,700,000     300,000             –     300,000  1,500,000
  Sub-total Business Development Department  6,127,500  5,343,812  6,100,000  1,875,100  2,740,200  4,615,300  6,200,000
CE Department (Joint Providership)     739,758     830,646     770,000     733,633     155,367     889,000     850,000
Technology       41,500       11,505       26,500       26,500             –       26,500       26,500
  Total New Bookings  6,908,758  6,185,963  6,896,500  2,635,233  2,895,567  5,530,800  7,076,500

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATING BUDGET
HISTORICAL FINANCIAL TRENDS

 


Fiscal Year
Beginning
Backlog
New
Bookings

Revenue
Operating
Income
2007  2,857,917  8,718,156  8,710,000    329,000
2008  4,452,675  5,803,215  8,282,000    267,000
2009  3,555,077  4,972,127  7,450,000      55,000
2010  2,403,439  5,733,736  5,422,000 (460,000)
2011  4,229,886  3,428,413  5,654,000      20,000
2012  3,343,452  5,102,598  5,385,000      44,000
2013  3,661,327  5,330,451  4,900,000    304,000
2014  4,522,543  3,734,745  6,306,000    714,000
2015  2,461,661  5,266,909  5,507,000    292,000
2016  2,716,797  5,108,585  5,966,000    441,000
2017  2,319,346  5,245,009  5,948,000    136,000
2018  2,099,601  6,186,413  5,334,000    128,000
2019 (Projected)  3,424,597  5,530,800  6,184,000    329,000
2020 (Budget)  2,155,872  7,076,500  6,679,000    355,000

Note: 2019 (Projected) Beginning Backlog is Actual Beginning Backlog

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 OPERATING BUDGET
Actual Bookings By Grantor
As of February 28, 2019

 

Grantor FY 2016 FY 2017 FY 2018 FY 2019 to Date
 AbbVie (Abbott)                    75,000                    50,000
 Acorda                  352,766                  352,766
 Allergan                    85,000
 Amgen                  189,492                    50,000                  120,000
 Biogen MA, Inc. (Biogen Idec)                  300,000
 Bioverativ (sanofi)                    75,000
 Boehringer Ingelheim Pharmaceuticals                  170,672                  330,000
 Celgene                    35,000                    90,000                    85,000
 CSL Behring                       (329)
 Daiichi Sankyo                    75,000
 Ferring                    50,000
 Forest                  115,000
 Genentech                  249,400                  375,000                  247,500
 Genzyme (sanofi)                  224,355                    60,000
 Genzyme (sanofi/Regeneron)                  190,000
 GlaxoSmithKline                  149,845                  415,000
 Incyte                  115,000
 Intercept Pharmaceuticals, Inc.                  125,000
 Ipsen                    20,000
 Janssen                  100,000
 MeadJohnson                  635,836                  406,100                  743,912                  700,100
 Merck                  175,000                  130,000
 Millennium/Takeda                    10,000
 Novartis                  175,000                  417,000                  235,000
 Novo Nordisk                    50,000
 Pfizer                  333,710                  545,160                  180,000
 Relypsa                  147,500
 Salix                    70,000
 Salix (Valeant)                  110,000
 Sandoz                    67,905
 Sanofi-Aventis                    67,905
 Shire                       (821)                    62,000
 Takeda Pharmaceuticals                  100,000
 ViiV                    90,000                  656,250                  145,000
 Zynx Health                    41,500                    26,500
Subtotal ACHS Projects               2,780,726               3,209,536               3,300,162               1,901,600
Joint Providership (Accreditation)                  320,947                  387,263                  613,833                  733,633
Total Bookings               3,101,673               3,596,799               3,913,995               2,635,233
Full Year Actuals Full Year Actuals Full Year Actuals Full Year Budget
Total Bookings                                5,108,585 5,245,009 6,186,413 6,896,500

 

ANNENBERG CENTER FOR HEALTH SCIENCES
FISCAL YEAR 2020 CAPITAL BUDGET

 

Capital Description and Quantity FY 2019
(Mar-Jun)
 FY 2020   FY 2021   FY 2022  Why do we need to purchase this capital item? Is this a replacement? What is the impact if this capital item is not purchased?
One Network/Database Server 3,000 This server houses Quickbooks and
serves as the primary domain controller.  It will be six years old in FY 19.
Yes.  The existing server can be recycled. Hardware for the server will no longer be supported by the manufacturer.  Additionally, the OS will no longer be supported by Microsoft as of January 2020.
Conference Room Technology 62,000 The audio visual equipment supports meetings for the Board of Directors and staff.  The equipment wll be 10 years old in FY 20. Yes.  The existing equipment can be recycled. Many of the components are considered end-of-life and are no longer produced.  It will be difficult to recover from hardware failures.
One Network Server 3,000 This server will support Microsoft Azure ADConnect which syncronizes learner access and credentials with cloud services Yes. The existing server can be recycled. Hardware for the server will no longer be supported by the manufacturer.  Additionally, the OS will no longer be supported by Microsoft as of January 2020.
 Siris Appliance Expansion 4,000 This appliance provides on-premises backups and network file share access.  The existing appliance is reaching storage capacity. No, this is additional storage for an existing appliance. The existing appliance will run out of space causing backups to fail and loss of network file share access.
One Server UPS (battery backup) per fiscal year 2,000 2,000 2,000 These need to be replaced every three years to protect the server room equipment from power related malfunctions which can lead to data loss and hardware failure Yes. The existing UPS may be recycled. Servers, router and switches are vulnerable to power surges and spikes which can lead to data loss and hardware failure.
Total ACHS 3,000 67,000 6,000 2,000

 

 

 

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