BUDGET FORMATS

Budget documents are presented in two main formats:

1. Line-item format

2. Program format

Line-Item Budget

The line-item budget focuses on specific goods and services to be purchased as objects-of-expenditure (Table 7.2). The line-item format helps appropriate funds for items related to personnel, equipment, supplies, utilities, and other needed items that are associated with specific accounts, and makes it easier to compare budgeted amounts to specific spending.

Program Budget

The program budget format plans funding for specific programs. Once the budget is approved, appropriation is made to specific items. The focus is on programs rather than on specific items within a program. Table 7.3 provides an example of a program budget format.

TABLE 7.2 Oshkosh Community Foundation—Line-Items Budget

Oshkosh Community Foundation, Inc.

Budget Federal Year 2007-2008

Income

Total in U.S. dollars

Contracts

630,000

Fund-raising

121,000

Grant

60,000

Total income

811,000

Expenses

Program expenses

340,000

Total program expenses

340,000

Administrative expenses

Salaries

140,000

Health insurance

85,000

Dental insurance

14,000

Rent

26,000

Janitor

16,000

Liability Insurance

15,000

Supplies

36,000

Utilities

21,000

Education allowances

16,000

Total administrative expenses

369,000

Total expenses

709,000

Surplus (Deficit)

102,000

BUDGET APPROACHES

A budgeting approach is the method or procedure used to develop a budget. The most common approaches are incremental, zero based, performance based, and project based. Regardless of the approach, the development of a budget is based on assumptions that will determine amounts of revenue and expenses in line items.

Incremental Budgeting

The incremental budget is developed from the past-year budget template or framework. In most cases, an incremental budget maintains core line items of past budgets. However, marginal changes or adjustments to current budgeted allowances are made based on certain assumptions. Let us consider the example of the Oshkosh Community Foundation in Table 7.3. The OCF runs programs in health, education, and housing. The budget for the last fiscal year is attached. The board hired you as a consultant to develop a budget proposal for the next fiscal year based on the following assumptions:

TABLE 7.3 Program Budget Format for Oshkosh Community Foundation—Federal Year 2009-2010

Revenue

Health

Education

Housing

Administration

Total in U.S. Dollars

Grants

100,000.00

50,000.00

45,000.00

0.00

195,000.00

Contracts

75,000.00

175,000.00

155,000.00

0.00

405,000.00

United Way

85,000.00

15,000.00

35,000.00

0.00

135,000.00

Individuals

10,000.00

5,000.00

0.00

0.00

15,000.00

Fees for services

150,000.00

10,000.00

165,000.00

0.00

325,000.00

Fund-raisers and events

200,000.00

50,000.00

0.00

0.00

250,000.00

Endowment

300,000.00

100,000.00

125,000.00 0.00

525,000.00

Interest income

30,000.00

10,000.00

12,000.00

0.00

52,000

Total cash revenue

950,000.00

415,000.00

537,000.00

0.00

1,902,000.00]

Expenses

Health

Education

Housing

Administration

Total

Staff salary

200,000.00

100,000.00

100,000.00

50,000.00

450,000.00

Benefits (25%)

50,000.00

25,000.00

25,000.00

12,500.00

112,500.00

Occupancy (rent and utilities)

6,000.00

6,000.00

3,000.00

3,000.00

18,000.00

After-school tutoring

0.00

200,000.00

0.00

0.00

200,000.00

First-time home buyer

0.00

350,000.00

0.00

350,000.00

Health prevention

400,000.00

0.00

0.00

0.00

400,000.00

Insurance

1,200.00

1,200.00

2,400.00

1,200.00

6,000.00

Legal, accounting

6,000.00

3,000.00

3,000.00

3,000.00

15,000.00

Equipment

75,000.00

10,000.00

10,000.00

15,000.00

110,000.00

Supplies

50,000.00

20,000.00

9,000.00

10,000.00

89,000.00

Printing and copying

6,000.00

5,000.00

5,000.00

5,000.00

21,000.00

Telecommunications

6,000.00

3,000.00

1,500.00

3,000.00

13,500.00

Travel and meetings

30,000.00

5,000.00

5,000.00

5,000.00

45,000.00

Marketing and advertising

10,000.00

5,000.00

5,000.00

5,000.00

25,000.00

Staff training/ development

15,000.00

10,000.00

12,000.00

5,000.00

42,000.00

Total expenses

855,200.00

393,200.00

530,900.00

117,700.00

1,897,000.00

Surplus (deficit)

94,800.00

21,800.00

6,100.00

(-117,700.00)

5,000.00

1. The housing contracts will not be renewed. Therefore, the agency cannot budget on these revenues.

2. The board decided to reduce the first-time home buyer program by 40%.

3. United Way stated that they will not be funding the health program next year due to changes in their strategies of community involvement.

4. The board decided to reduce all administrative costs by 10%, except salary and benefits.

5. The board plans to increase the fund-raising revenues of the agency by 20%.

Based on the above assumptions, the proposed budget for the next fiscal year will become the following (Table 7.4):

TABLE 7.4 Oshkosh Community Foundation—Proposal Budget, Fiscal Year 2010-2011

Oshkosh Community Foundation

Proposal Budget FY 2010-2011

Revenue

Health

Education

Housing

Administration

Total in U.S. dollars

Grants

100,000

50,000

45,000

0

195,000

Contracts

75,000

175,000

0

0

250,000

United Way

0

15,000

35,000

0

50,000

Individuals

10,000

5,000

0

0 15,000

Fees for services

150,000

10,000

165,000

0 325,000

Fund-raisers and events

240,000

60,000

0

0 300,000

Endowment

300,000

100,000

125,000

0 525,000

Interest income 30,000

10,000

12,000

0 52,000

Total cash revenue | 905,000

425,000

382,000

0 1,712,000

Expenses Health

Education

Housing

Administration Total

Staff salary and benefits

200,000

100,000

100,000

50,000 450,000

Benefits (25%)

50,000

25,000

25,000

12,500 112,500

Occupancy (rent and utilities)

6,000

6,000

3,000

2,700 17,700

After-school tutoring

0

200,000 0

0 200,000~]

First-time home buyer

0 210,000

0 210,000

Health prevention

400,000

0 0

0 400,000

Insurance

1,200

1,200 2,400

1,080 5,880

Legal, accounting

6,000

3,000 3,000

2,700 14,700

Equipment

75,000

10,000 10,000

13,500 108,500

Supplies

50,000

20,000 9,000

9,000 88,000

Printing and copying

6,000

5,000 5,000

4,500 20,500

Telecommunications

6,000

3,000 1,500

2,700 13,200

Travel and meetings

30,000

5,000 5,000

4,500 44,500

Marketing and advertising

10,000

5,000 5,000

4,500

24,500

Staff training/ 15,000 development

10,000

12,000

4,500

41,500

Total expenses

855,200

393,200

390,900 112,180

7,757,480

Revenue over expenses

49,800

31,800

-8,900

-112,180

-39,480

 
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