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 SalaryNumber of FTEs
Executive director
$100,000
1
Training supervisor
$80,000
1
Trainers
$50,00010
Administrative coordinator
$45,0001
Administrative staff
$25,0003
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.
1. Line-Item Budget Table:
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| Basic Skills Program | Vocational Program | Total
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Rent | $75,000 | $50,000 | $125,000
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Utilities | $60,000 | $40,000 | $100,000
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Office supplies | $15,000 | $10,000 | $25,000
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Equipment/lease | $30,000 | $20,000 | $50,000
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Transportation and travel | $60,000 | $40,000 | $100,000
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Outside consultants | $60,000 | $40,000 | $100,000
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Overhead costs | $60,000 | $40,000 | $100,000
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Personnel expenses | $270,000 | $180,000 | $450,000
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Total Expenses | $630,000 | $420,000 | $1,260,000
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2. Combined Functional and Program Budget:
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| Basic Skills Program | Vocational Program | Total
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Operating Expenses per Year | $630,000 | $420,000 | $1,050,000
Personnel Expenses per Year | $270,000 | $180,000 | $450,000
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Total Expenses per Year | $900,000 | $600,000 | $1,500,000
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Number of Eligible Students | 1,000
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Cost per Enrolled Student | $900 | $600 | $1,500
1. Line-Item Budget Table:
| Category | Expense | Amount |
|------------------------|-------------------|------------------|
| Operating Expenses | 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 | Executive director| $100,000 |
| | Training supervisor| $80,000 |
| | Trainers | $500,000 |
| | Administrative coordinator| $45,000 |
| | Administrative staff | $75,000 |
| Employee-related benefit expenses | Employee-related benefit expenses @ 25% | $200,000 |
| Total | | $1,595,000 |
2. Combined Functional and Program Budget:
To calculate costs per enrolled student, we will allocate the expenses based on the formula provided:
- 60% to the basic skills program
- 40% to the vocational program
Step 1: Calculate the total allocation for each program:
Basic skills program: 60% of $1,595,000 = $957,000
Vocational program: 40% of $1,595,000 = $638,000
Step 2: Calculate the cost per enrolled student:
Number of eligible students: 1,000
Cost per enrolled student for the basic skills program: $957,000 / 1,000 = $957
Cost per enrolled student for the vocational program: $638,000 / 1,000 = $638
Functional and Program Budget Table:
| Category | Basic Skills Program | Vocational Program |
|--------------------------|-----------------------|-----------------------|
| Operating Expenses | | |
| Rent | $76,250 | $48,750 |
| Utilities | $60,000 | $40,000 |
| Office supplies | $15,000 | $10,000 |
| Equipment/lease | $30,000 | $20,000 |
| Transportation and travel | $60,000 | $40,000 |
| Outside consultants | $60,000 | $40,000 |
| Overhead costs | $60,000 | $40,000 |
| Personnel Expenses | | |
| Executive director | $100,000 | $0 |
| Training supervisor | $0 | $80,000 |
| Trainers | $570,000 | $370,000 |
| Administrative coordinator| $27,000 | $18,000 |
| Administrative staff | $45,000 | $30,000 |
| Employee-related benefit expenses | | |
| | | |
| Total per enrolled student | $957 | $638 |
Note: The remaining $5,000 from the total budget is not allocated to any specific category and can be used for contingencies or other purposes not specified in the information provided.