Creating a Budget
Various budget approaches play an important role in resource allocation in human service organizations. You are the executive director for a local government workforce agency that focuses on providing career- and work-related skills. The Department of Education has awarded your agency with grant funding of $1.6 million to provide training programs to high school dropouts. The funded programs are a basic work skills training program and a vocational program. You are preparing a budget matrix to present to the awarding agency. The matrix budget consists of line-item, functional, and program budgets.
Operating Expenses: Per Year
Rent
$125,000
Utilities
$100,000
Office supplies
$25,000
Equipment/lease
$50,000
Transportation and travel
$100,000
Outside consultants
$100,000
Overhead costs
$100,000
Personnel expenses: Annual Salary Number of FTEs
Executive director
$100,000
1
Training supervisor
$80,000
1
Trainers
$50,000 10
Administrative coordinator
$45,000 1
Administrative staff
$25,000 3
Employee-related benefit expenses @ 25%
$200,000
All costs excluding the salary of the executive director and training supervisor will be allocated according to this formula:
60% to basic skills program
40% to vocational program
Number of eligible students: 1,000
Use the information above to create each of the following:
1. A line-item budget table showing all associated costs implementing the training programs.
2. A combined functional and program budget to calculate all costs per enrolled student.
I need help understanding how to complete question 2.
To complete question 2, which involves creating a combined functional and program budget, you need to calculate all costs per enrolled student. This budget will provide the total cost associated with each training program per student.
Here's how you can approach it:
1. Calculate the total operating expenses by summing up the costs listed under "Operating Expenses."
Total operating expenses = Rent + Utilities + Office supplies + Equipment/lease + Transportation and travel + Outside consultants + Overhead costs
2. Calculate the total personnel expenses by summing up the costs listed under "Personnel expenses."
Total personnel expenses = Salary of executive director + Salary of training supervisor + (Salary of trainers * Number of trainers) + Salary of administrative coordinator + (Salary of administrative staff * Number of administrative staff) + Employee-related benefit expenses
3. Determine the total cost per program by allocating the total operating expenses and total personnel expenses according to the given formula:
Basic skills program expenses = Total operating expenses * 60%
Vocational program expenses = Total operating expenses * 40%
Note: The personnel expenses are allocated based on the same formula.
4. Calculate the total cost per enrolled student for each program:
Cost per student for basic skills program = Basic skills program expenses / Number of eligible students
Cost per student for vocational program = Vocational program expenses / Number of eligible students
Now, you have the combined functional and program budget showing the total costs per enrolled student for each training program.