« Return to FMDAA entries

University of Chicago

Overview

The operations and maintenance (O&M) unit of facilities services is comprised of trades/engineering/campus services, residential properties, residence halls and dining, and utility plants. These shops perform a multitude of activities to keep the university’s physical campus operating. However, the financial structure supporting spending, monitoring, and invoicing associated with these activities did not effectively separate, categorize, and account for costs by trade activity. This made it difficult to report by activity, budget for future years, and report to management.

The O&M shops include trades such as carpentry, landscaping, plumbing, electric, and painting. The costs related to these various services were all commingled into one subaccount. This one subaccount was a muddle of several costs consisting of all different types of services. This presented several challenges to operations leadership and its team. These challenges included:

• Spending (costs) could not be easily identified by the expense activity.
• O&M shops were consistently overspending budgets and could not explain variances. 
• Leadership could not identify the type of expenses that were over budget to hold shop supervisors accountable. 
• Leadership could not analyze historical spending.
• Leadership could not identify savings. 
• Future years’ budgets were meaningless because budgets could not be accurately estimated/produced/calculated/projected.
• An extensive and lengthy aging invoices log existed. 

In an effort to track and monitor costs by trade, operations and finance staff partnered to identify solutions to address each challenge. As a result, four improvements were developed:

• A chart of accounts was defined that assigned a unique account to each activity. 
• Monthly finance meetings were established with O&M unit supervisors to review transactions, explain variances, identify any future costs, and address aging invoices. 
• A monthly reporting tool was created called the Operating Budget Summary / Budget to Actual, which formalized the reporting format. 
• Update of the systems that assign the accounts based trade activity, along with training of operations personnel on the systems. 

The most significant challenge was the building engineers embracing change. The building engineers had to learn the new subaccount line items and retrain on their handheld devices.

Previously, when entering work orders on their handhelds, the work defaulted to a general subaccount. With the development of the chart of accounts, the building engineers were required to select the appropriate subaccount line item for the type of work completed. Also, since trade activities are separated by type of work and easily identified, the building engineers were now held accountable to explain overspending. The implementation team was able to overcome challenges through training sessions and monthly meetings with operations and maintenance unit supervisors.

The implementation of this practice has favorably impacted operations. Foremost, we are able to track and explain costs. We accurately report, update, and monitor financial activities in operating accounts. Operations leadership is provided with a report that gives them an accurate summary of the operations portfolio to better plan and make informed decisions. Since the implementation of the chart of accounts, monthly meetings, and the Operating Budget Summary / Budget to Actual Report, we have reduced the amount of aging invoices, reduced the unplanned carryover of costs into subsequent fiscal years, and eliminated costs posting errors. We improved in the areas of explaining variances, identifying spending trends, making better accrual estimates, forecasting, and identifying cost savings.

In-house Participants

Operations and maintenance (O&M) unit, finance unit, IT unit

↑ Back to top