Budget analysis

Your assignment is to review three draft budgets for the coming year prepared for the same program comparing each to the budget for the current year. After analysis you will recommend any changes to allow for a balanced budget or even a surplus! The provision of high-quality care for young children is expensive and funds must be allocated properly to provide a developmentally sound program. No matter how good the intentions of the staff a program cannot continue to operate for long without a balanced budget. Directors are responsible for the center’s proper fiscal management and for ensuring that needs of children staff and parents are considered when a budget is created. For this assignment required APA format will consist of a title page with a running head and reference page with citations in proper format. Every director should be able to analyze a budget sheet and determine if the center will break even make a profit or have a deficit. Armed with this knowledge the director can then make any necessary adjustments to ensure the center is financially sound. This activity is designed to introduce you to a simple budget and familiarize you with the task of reading a spreadsheet and analyzing where problems exist. Once you have determined the problem area or areas you will make adjustments so income equals or exceeds expenses. To help you understand the importance of budgets to the success of any center review the materials provided in the week 10 folder as follows: 1) Analyzing Financial Information 2) Making the Budget Work 3) Is Your Center in Good Financial Health? 4) Surviving Tight Times 5) Iron Triangle 6) How To Make a Basic Budget 1) Review the three budgets located in the week 15 folder. Spend some time comparing the budgets side-by-side item-by-item. You will see that some items are identical and some are very different as is the bottom line. For this assignment you will compare each budget for the current year to the draft budget for the coming year – three (3) comparisons in all. 2) Of course you do not have all the information needed to analyze these proposed budgets in depth but your task is simply to find any items that seem unreasonable or out of balance with the current year’s budget. It is to be expected that certain expenses (such as payroll and accompanying taxes) increase each year but that increase usually is between 3-10%. 3) Using your common sense and any information gleamed from the articles or other experiences you have had with balancing budgets identify any specific items which seem unreasonable or out of balance. 4) Complete sections I II and III for submission. 1) Create a document responding to the following items for each draft budget in turn: 2) Revise each of the budget sheets so that income and expenses are in balance or there is a reasonable surplus; and respond to the following items for each revised budget in turn: Ensuring that fiscal matters are in is one of the more pragmatic responsibilities of a director with potential repercussions that affect everyone involved – children families and staff members. Take some time to think of the myriad of ways a center’s financial health impacts a center program. As closure for this assignment write a short essay covering the following points: BE AWARE THAT TOTAL EXPENSES CANNOT EXCEED TOTAL INCOME FOR EACH BUDGET. IT IS YOUR TASK TO BALANCE EACH BUDGET. ALSO BE AWARE THERE ARE NO ABSOLUTE RIGHT ANSWERS JUST REASONABLE ONES. Requirements: . | .doc file After reviewing the income section are there any items that seem unreasonable to you? Why do you think so? After reviewing the expenses section are there any items that seem unreasonable to you? Why or why not? What suggestions do you have to balance each of the budgets? Does your newly balanced budget include funds for capital improvements? Why or why not? Does your revised budget require an increase in fees? Why or why not? If fees are increased how will this information be shared with parents? If fees are not increased how will you fund expected increases in fixed costs such as insurance and utilities? Does your revised budget include a pay raise for staff members? Why or why not? If a pay raise was factored into expenses how would the amount of raise be determined for each staff member? Is it possible to reduce expenses while still providing a high-quality program for children and families? Which if any specific expense items have a direct effect on the quality of program children receive? How does the state of a budget affect the quality of a program? Give specific examples based on your experience in the field. What effect might a budget have on working conditions as well as staff turnover and morale? As a director and center leader what can you do to ensure that morale is high and staff turnover low no matter what the state of the budget? In way ways does the state of the budget affect children enrolled in the program and their parents? Looking at a larger picture are there any cultural political or financial conditions that may have an effect on a center’s budget? In your opinion what is the most important single thing for a director to understand about the center budget? Save each of your revised budgets demonstrating how you managed to balance them either breaking even or hopefully with a small surplus for the year. Submit your written document with responses to all questions/items in sections I & II. Be sure to cover each bulleted item thoroughly. Submit section III with each of the three (3) revised budgets.