A variance analysis should be performed on an annual basis by all centers. The purpose of the analysis is to compare the estimated costs of a rate proposal to the actual costs for the same time period. This will aid centers in determining their variance between cost estimates and actuals from year to year.
Variance Analysis Report Due Date
Variance reports are due within 6 weeks of the approved rate cycle end date.
Preparing the Report
Rate Cycle Dates – Be sure to include the dates on which the report is based. These dates should be the approved rate cycle dates.
Proposal Estimates – enter the estimated cost amounts from the proposal in this column (estimated revenue is not required).
Actual Costs and Revenues – enter the actual costs/revenues from UW’s financial system in this column for the time period being reported.
The variance dollar figure and percentage will auto-calculate.
An explanation is required per category if there is a variance of an amount equal to or greater than $5,000 AND equal to or greater than 10%. The variance needs to meet both these criteria before an explanation is needed.
Variance Explanations – these should be concise while ensuring the variance is addressed.
*Mid-year rate adjustments – in these instances centers should still use the originally approved rate proposal for variance analysis reporting purposes. If a material variance occurs related to the mid-year rate adjustment it should be noted on the report.
Service centers should submit the Variance Analysis Report to MAA and their Dean’s/VP’s office.
Recharge centers need only submit their variance report to their Dean’s/VP’s office.