CareSafe performance budgeting system, and program budgeting (Martin,
CareSafe Foster Systems Budget Teresa Akers, Tara Bryant-Lowe, Charlene Carter, BSHS/373 October 10, 2011 O. Biu CareSafe Foster Systems Budget The team reviewed the CareSafe Foster Systems Budget to see if changes needed to be completed.
We asked questions that would assist in the company’s future budget to show stability and contribution gain. The company is learning what a workable budget is and the importance of it. We will give them four suggestions of how they can increase their surplus, and we will explain the pros and cons of each suggested method.We will give the company insight into issues that could occur if they do not put some programs into place. CareSafe is obtaining an education on how to structure their budget in the future for future growth. Importance of a Workable Budget Dr.
Drexel should know a workable budget should be a plan for the accomplishment of programs related to objectives and goals within a period or a fiscal year (Martin, 2001). A workable budget should indicate how much is being spent and when should the money be spent. The budget when allocated should indicate if the budget is unrestricted or restricted.Moreover, we would explain the three major budgeting systems: line-item budgeting systems, performance budgeting system, and program budgeting (Martin, 2001). These functions help explain the budget and how CareSafe money is being spent in detail with more of an explanation in many cases the budget we prepare provided information; however, information could have been explained in more detail with the various expense from the agency.
At the end of the year the budgets are audited for compliance to ensure money was spent as it should and the organization accounted for funds being spent from the budget within the agency.Problems foreseen in CareSafe’s Financial Future Caresafe’s future looks good. The contributions to the agency are steady as of the operating budget for the fiscal year.
However, we believe the agency should work toward a surplus for the agency just in case there is an emergency. The expense doesn’t show too many discrepancies or anything that would be a problem in the future. The agency has done a good job with documenting expenses within the CareSafe Foster Systems Furthermore, the company should set up finance control to protect the finances of the organization to prevent any problems in the future.
When preparing the budget, we did not see these options available within the budget. The agency should incorporate risk management in budget within the agency for financial protection. If CareSafe prepares line item budget to show additional inputs and outputs when the agency is being audited this will help the auditors with the agencies budget and will show details that are needed to ensure the budget is balanced. Caresafe’s budget looks good minor improvement should take place. CareSafe Foster Systems Budget | Overall Budget | | | | | | | | | | | | | | | Individual Counseling | Group Therapy | Parent Consultation | Home Assessment | Total| | | | | | | | | | | | Number of Visits| | 4000| 5000| 7000| 7000| | | Price per Visit| | 160| 100| 90| 55| | | Total Revenue| | $ 640,000 | $ 500,000 | $ 630,000 | $ 385,000 | $ 2,155,000 | | | | | | | | | | | | Variable Expenses per Visit| | | | | | | | | Social Worker | | | | | | | | | | minutes per visit| | 55| 50| 25| 10| | | | | wage per minute| | $ 1.
40 | $ 1. 40 | $ 1. 40 | $ 1. 40 | | | | | total expense per visit| | $ 77. 0 | $ 70.
00 | $ 35. 00 | $ 14. 00 | | | | Administrative Assistant | | | | | | | | | | minutes per visit| | 10| 15| 15| 10| | | | | wage per minute| | $ 1. 00 | $ 1. 00 | $ 1. 00 | $ 1.
00 | | | | | total expense per visit| | $ 10. 00 | $ 15. 00 | $ 15. 00 | $ 10.
00 | | | | Supplies | | | | | | | | | | units per visit| | 4| 3| 3| 2| | | | | expense per minute| | $ 4. 20 | $ 4. 20 | $ 4. 20 | $ 4. 20 | | | | | total expense per visit| | $ 16. 0 | $ 12. 60 | $ 12.
60 | $ 8. 40 | | | | | | | | | | | | | | Total Variable Expenses per visit| | $ 103. 80 | $ 97. 60 | $ 62. 60 | $ 32. 40 | | | | | | | | | | | | | Total Variable Expenses| | $ 415,200 | $ 488,000 | $ 438,200 | $ 226,800 | $ 1,568,200 | | | | | | | | | | | | Contribution| | $ 224,800 | $ 12,000 | $ 191,800 | $ 158,200 | $ 586,800 | | | | | | | | | | | | Total Fixed Expenses| | | | | | $ 320,000 | | Overhead| | | | | | $ 200,000 | | | | | | | | | | | Surplus/Deficit | | | | | | $ 66,800 | Methods Used to Increase the Surplus The four methods we picked are the line-item budget systems, performance budgeting systems, programing budgeting systems, and the monitoring performance and program budgeting systems.
We have a brief summary of how the systems are applied, and we determined the system that would work best for CareSafe. Line-Item Budget Systems This method is the most repeatedly used budget system in human service agencies in addition to other organizations.The main purpose of line-item budgeting system is to control the finances. This method is an administrative tool to make known funds used and items purchased. The advantage of line-item budget system is the method that make’s it easy for the administrators to view the budget the source and amounts of the agency’s revenue, and it allows staff members to view how the funds are used in terms of travel, equipment, etc. On the other hand there maybe items omitted or indicate funds without mentioning how service a human service agency provides.
Performance Budgeting Systems This method provides information on productivity of human service programs. Such as total program cost, amount produced, and cost per unit. The arrangement of the performance budget is different from line-item budget its focus is on the amount of service provided from program to program, the entire cost of the program input and output. The advantages of performance budgeting systems are that the information provided is based on the performance of the human service agency’s how much it cost to provide the programs and services.The disadvantage of performance budgeting systems is that human service agencies must hire complex cost individuals to decide the entire cost of a program and come to a final cost.
Programming Budgeting Systems This method is associated with the expenses to programs, measures of program results, and the cost of the services completing results. The advantage of this method is it provides information based on number of clients and results accomplished, the disadvantage of this method is that good results are most often hard to create. Most human service programs are not normally accepted because the result is un-measureable.Monitoring Performance and Program Budgeting Systems This method is similar to line-item budgeting whereas it is monitored throughout the year. The report is basically like CareSafe’s financial report instead of the focus being online items, the attention is on outputs or units of service, results and their cost (Martin, 2001). The Method Feasible to Implement The team believes the Line-Item Budget System is the most feasible method to implement because it gives the administrators a complete view of funds coming in and results of funds going out.
The line-item budget system’s advantages out weight the disadvantages using this method. This method shares the results are effective whereas if there is a line-item not appropriate for the budget or will cause the agency some financial harm it can be deleted or adjusted without taking from the program. This method also allows the agency to view the sources, amounts, revenues, and how the funds will be used such as how many additional staff members is needed, equipment, facilities, etc. (Martin, 2001). ConclusionWe evaluated the CareSafe’s budget, and we determined the Line-Item Budget System would assist the organization in their financial growth and surplus. The budget did look fine; however, we did find some minor updates to the budget would benefit the organization long-term.
Most organizations are incorporating a risk management, which provides finance controls. The Line-Item Budget System will allow the organization to clarify debits and credits when they are audited. References Martin, L. (2001). Financial Management for Human Service Administrators. Published by: Allyn & Bacon.