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Mike English
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Mike English

Analytics, Budget, Forecasting, 5Cast, COVID-19

Providing a COVID-19 Financial Road Map to Your Governance Board

Posted on Jun 4, 2020 8:37:11 AM

On a recent statewide webinar, one of our 5Cast clients shared a PowerPoint presentation that had been recently delivered to his governance board. That presentation combined information about the status of the current-year budget, as well as multi-year projections that included COVID-19 scenarios. I thought the entire presentation was concise and very effective, but there were two slides that really stood out for me.

The first slide was a 5Cast Fund Balance Dashboard that included the results of four financial scenarios:

1.  A Pre-COVID scenario based on start-of-the-year assumptions
2. A Best-case scenario based on a quick V-shaped economic recovery in the US
3. A Medium-case based on a U-shaped economic recovery
4. A Worst-case based on assumptions modeling an extended economic recession

RoadMap Fund Balance

The second slide that resonated with me was a simple Assumptions Grid which was color-coded to match the graph colors from the first slide. The information contained in the grid summarized key revenue assumptions driving the results of each of the scenarios.

RoadMap Simple Assumption

What's special about a financial Assumptions Grid?

I enjoyed seeing the 5Cast dashboard being included in the PowerPoint presentation, but what struck me about the slide with the Assumptions Grid was how clearly it "road-mapped" the revenue scenarios for the governance board. In a crisis as multi-faceted as COVID-19, it was an excellent strategy for simplifying the presentation of complex financial scenarios using easy-to-understand "mile markers" with respect to the key revenue drivers within the financial plan.

It would be reasonable for a board member to look at the graph of financial results and ask, "How will we know on which scenario line we are traveling?" The Assumptions Grid will provide the answer. As time progresses and new information becomes available, their governance board can track several publicly available metrics that may impact the organization's revenue. By tracking these metrics in real time, the board will know on which revenue path they are traveling (best/medium/worst case). With that information in hand, the board can then make measured, data-informed decisions.

I liked the Assumptions Grid so much, I suggested that the client laminate it like map... or, even fold it up into a wallet-sized carry-along that could be pulled out at future meetings!

To hear a recording of the discussion surrounding our client's use of these communication tools, fast-forward to the 1:00:21-minute mark in this video. If you need help presenting COVID-19 financial scenarios to your governance board, please reach out to us for more examples of effective ways of presenting them.

 

Mike English is a founder and the CEO/President of Forecast5 Analytics, Inc.—a technology company focused on software development and data analytics for the public sector. Mike has spent his entire career concentrating on the development of financial and strategic solutions for schools and municipalities. Forecast5 is headquartered in Naperville, Illinois, a suburb 30 miles west of Chicago.

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