Annual Planning: Key Steps for Implementation

Around this time each year (i.e. March and the fiscal year-end), Indigenous governments are required to complete specific admin and finance processes.  This typically includes Financial reporting, Auditing, Budget preparation, Grant reporting, and Compliance and regulatory reporting. Right now (March), Budget preparation is critical for organizations as the fiscal year comes to a close. Discussed below are the steps to create an annual plan involving budgeting preparation to ensure you’re ready for the upcoming fiscal year.

Key Steps

1.     Reflection and Review

First, as any historian or planner would say, understanding our past teaches us about the present and the essential learnings to apply to our future. To do this at an organization or community level, we set the tone for the annual review by reflecting on the established goals, vision, and mission and asking, do they still ring true? Do these statements still accurately represent our community? If they do, keep them close to mind and heart when creating the rest of the planning for the upcoming fiscal year. If not, revise and make the necessary changes with the help of leadership and your community.

Next, review and reflect on the work done to date. Using any long-term plans to guide this discussion and determine:

1.     What has been accomplished?

2.     What needs to be done?

3.     Is there anything planned that’s no longer necessary?

Using these answers, reflect on your biggest accomplishments to date and if there were opportunities to improve. Importantly, if you have achieved any significant accomplishments, ensure you are celebrating them! Ensure your people feel proud and rewarded for the positive impacts they create. If there were opportunities to improve, how can we make sure to address those in the future?

2.     Goal Setting

Next, start setting goals for the year! Again, you’ll want to align with your long-term or strategic plan to confirm what goals need to be started or accomplished this year. Connect with each department or individual responsible to discuss:

1.     How the goals will be implemented,

2.     Any predicted obstacles, and

3.     If any new goals or actions need to be brought forward this year.

Each goal should have the relevant Key Performance Indicators (KPIs) to inform the status of the goal and when the goal has been completed. Having a system that tracks and reports on each goal and its KPIs regularly ensures the team can adjust the plan if the KPI results are not aligning with the goal. This is a crucial tool to inform if you’re on your way to creating a positive impact!

4.     Development of Programs and Activities

Now that your goals and KPIs are set, determine, and develop specific programs and activities that will help your organization achieve your objectives. When creating the programs and activities, start identifying and documenting the resource needs, such as staffing and equipment. Ensure leadership, departments, and the community is involved in these discussions. There are typically many ways to accomplish your goals, but only a few will be implementable if they do not best align with your people.

5.     Estimating Costs

Once you have developed and have consensus and buy-in on the programs and activities, you’ll need to identify the associated costs. The costs may include salaries and benefits, equipment and supplies, travel, and other related expenses. Note that past financial statements can be a great tool to help estimate some of these costs; however, they may not be the best source for all estimated costs. A lot of research and holistic thinking will be required in this step to ensure the costs are as accurate and detailed as possible.

6.     Determine Revenues Sources

Next, you’ll want to determine how the set programs and activities will be funded, i.e., your revenue sources. Revenue sources can come from government grants, fundraising activities, fees for services, and any other relevant revenue sources to your organization. You’ll want to optimize this part and create approximately a 25% cushion room based on your estimated costs. All of this information will then be collated into a preliminary budget.

7.     Prepare Budget Documents

A budget summary and spreadsheet should then be created to document each program’s costs and revenue sources in detail. Knowing the total budget information and program and activity details, you can create a timeline to set each activity and program’s start and completion dates. Once completed, these documents can be sent to the organization’s governing bodies for review and approval.

8.     Monitoring and Adjusting Budget

After the budget review, ensure all desired revisions and corrections are made based on the feedback from the governing bodies. Then, once the budget is approved, ensure that someone is responsible for monitoring the actual revenue and expenses against the budget on a regular basis. Having a key person own this responsibility and make adjustments as needed ensures you stay within your budget and achieve your goals.

*It's important to note that the specific steps involved in preparing an annual plan and budget may vary depending on the size and type of the Indigenous government or organization and other factors such as funding sources and the program area.