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 |
