Hands on Budgeting Wendy Watson April 18, 2008. Agenda Why and when to budget? Types of budgets Revenues Expenses Cost allocation Types of budget Reports.

Slides:



Advertisements
Similar presentations
SHOW ME THE MONEY BUDGETING 101.
Advertisements

READING & UNDERSTANDING FINANCIAL STATEMENTS. March 2006 Session Objectives Learn techniques to better understand financial statements Understanding.
MANAGEMENTS DISCUSSION & ANALYSIS NMASBO Fall Conference 2012 Taos, New Mexico Presented by Leslie Smith, Retired Business Manager.
BUSINESS & PERSONAL FINANCE LEVEL 3M. DEFINITION Money management is the control of cash flow.
FOR NON-PROFIT ORGANIZATIONS Presented by Henrietta Jordan.
Chapter 6 Funding the Program ©2013 Cengage Learning. All Rights Reserved.
Nonprofit Finance and Reporting: What every board member should know Molly Lovelock
VICKI VANDENBERG, CPA PARTNER KEITH MARTINEZ, CPA ASSOCIATE PLANTE MORAN DECEMBER 13, 2011 Net Asset Classification – Why Is It Important?
Board of Directors Meeting, November 17, Finance Committee Report.
Understanding Financial Statements Prepared for Delaware Valley Grantmakers 11/2011 Katherine Reilly, CMA
Developing a Basic Program Budget Harkmore Lee, CALCASA.
Chapter 3 Cash Flow and Financial Planning. Copyright © 2006 Pearson Addison-Wesley. All rights reserved. 3-2 Analyzing the Firm’s Cash Flows Cash flow.
Financing Unit 6.
Understanding Financial Statements
Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations Chapter 13 © 2011 Cengage Learning. All Rights Reserved.
Financial Accountability for Nonprofit Organizations Thomas P. Holland, Ph.D. Professor, UGA Institute for Nonprofit Organizations.
FINANCIAL MANAGEMENT: MOVING TOWARDS FINANCIAL SUSTAINABILITY © 2012 DALE NEEDLES.
Welcome to the Board! (and did we mention your Fiduciary Responsibility?)
DAINGERFIELD-LONE STAR INDEPENDENT SCHOOL DISTRICT Budget Hearing August 18, 2014.
Presented by: Professor N Amy Santos, State College of Florida GOVERNMENTAL ACCOUNTING.
Chapter 6 Accrual Accounting Concepts and the Accounting Cycle.
Financial Leadership Presenter This program supports implementation of the Standards for Excellence® Code.
How to Get Your Board “Onboard” with Non-Profit Financial Statements Stephanie O’Leary, Senior Consultant at AMS December 4, :30 pm – 1:30 pm.
Audit Committee 28 June 2011 Financial Accounts Claire Cook -Assistant Finance Director and Joanne Watts – Head of Finance.
Training on Financial Management for Fiscal and Asset Managers Technical Assistance for Community Services and Housing Development Center April 2, 2008.
 Roles and Responsibilities  Budget  Bookkeeping  Reading financial statements.
FINANCIAL CONCEPTS ALL CHARTER BOARD MEMBERS NEED TO KNOW JOHN TARVIN SESSION 5 - TUE, JULY 2, :15 – 3:30.
Transfer Payment and Financial Reporting Branch Ministry of Education Financial Statement Checking Procedures TPFR Information Sessions Fall 2007.
Presented by: Brian Carter, CPA Partner Mauldin & Jenkins, LLC Karen Jubrail Vice President of Development Glazer Children’s Museum 1.
Audit Commission Presentation Salford City Council Consideration of the financial statements.
University of Georgia Foundation University Council Presentation December 2, 2004.
BUDGETING – CRADLE TO BOARD AT THE UNIVERSITY OF OTTAWA CAUBO – Pre-conference June 23, 2007.
The 3 main financial statements How they give us different kinds of information about organisational performance.
Accounting & Financial Analysis 111 Lecture 12 Cost – Volume – Profit Analysis Horizontal & Vertical Analysis Common Errors in End of Period Reports Essential.
School Finances for Finance Subcommittees School Councils.
Financial Leadership in Turbulent Times Steve Zimmerman Spectrum Nonprofit Services.
5.01 Budget Planning & Control. Budget Planning Financial planning is one tool managers use to improve profitability. Planning the financial operations.
Adult Education and Literacy Budget Development and Cost Allocation.
University of Minnesota Office of Internal / External Sales Fiscal Year-End Actions for Internal/External Sales Organizations.
Overview Goal Setting. Budget The Importance of Budgeting Preparation of an annual budget and continuous budget monitoring allows management to anticipate.
City of Rio Vista Budget 101 An Overview of Essential Tools CITIZENS OF RIO VISTA CITY STAFF CITY COUNCIL.
Chapter 3 1. Learn the purposes and types of budgets
DAINGERFIELD-LONE STAR INDEPENDENT SCHOOL DISTRICT Budget Hearing August 29, 2013.
FINANCIAL MANAGEMENT SYSTEMS REGION 3 FISCAL FORUM ATLANTA, GEORGIA APRIL 26-29, 2005.
Financial Management and Budgeting The Details. What Is a Budget? A useful tool for keeping track of funds. A useful tool for keeping track of funds.
Jim Raines, Ph.D. Collaborative Health & Human Services PA 412 Public Budgeting & Finance.
Future Research Leaders Program Module 5 Financial, Resource and Risk Management.
Budgeting and Costing Convery  Articulate the challenges of budgeting and reporting on whether the budget was met  Describe various types of.
Financial Reports Understanding and interpreting monthly financial reports.
© 2012 Delmar, Cengage Learning Section V Getting the Job Done… Through Others Chapter 14 Budgeting and Managing Costs Creatively.
London Life Young Leaders United Way of London & Middlesex Financial Reports & the Board of Directors by Angela Byrne CPA CMA October 3, 2015.
Board Financial Oversight Governing Board Online Training Module.
Budgeting and financial management
Understanding your Budget, P&L statement and Balance Sheet
Budgeting and Cash Flow Management
Generally Accepted Accounting Principles (GAAP)
Power in Numbers: Breaking Down Budgets & Financials
Presentation on the Joint Standing Committee on Financial Management of Parliament 07 September 2016.
Budgeting and Cash Flow Management
Financial Highlights as of September 30, 2018
Budgeting and Cash Flow Management
Nonprofit Finance oversight and management
Budgeting and Cash Flow Management
Finance for Non-Financial Managers
5.01 Budget Planning & Control
Cash Flow and Financial Planning
FINANCIAL HIGHLIGHTS Education Harris County Department of
Cash Flow and Financial Planning
Presentation transcript:

Hands on Budgeting Wendy Watson April 18, 2008

Agenda Why and when to budget? Types of budgets Revenues Expenses Cost allocation Types of budget Reports A few brief words about accounting systems Budget work session

Wendy’s Disclaimer

Why budget? Planning Track use resources over time Inform decisions Record of what an organization plans to do, and did Supports integrated funding It’s required

When to budget? Annually For grants or start ups In advance to allow time for approval processes Allow time for adjustments Over time to keep track of pending and secured funding

Types of budgets Pie in the sky budgeting Reality budget A hybrid model Single service, single source budgets Integrated, or braided or blended

Who should budget? Administrative staff (coordinators, directors, managers) may help prepare and implement budgets Oversight groups – boards, councils, executive committees inform, approve and monitor budgets Staff Inform, may help prepare and may implement budgets Fiscal Agent

Revenues Grants –Restricted –Unrestricted Donations Fundraising possibilities –Learn the rules that guide donations, fundraising, fees Public Dollars from taxes

Revenue considerations Cost effectiveness Audit requirements Are overhead costs allowable for the funding source

Expenses Expenses: Generally do not have a future value Capital Expenditures: Generally have a future value Direct and indirect expenses and grants Overhead

Questions to use in budget review Are the amounts realistic? Can you understand what is being funded and how the amount was determined? Are line items in appropriate categories? What does this budget tell you about priorities of this organization? Is there anything that may cause concern? Note anything else about this budget you wonder about or find intriguing? National Economic Development and Law Center

Budget Review: Small Group Activity

Common Challenges with ECC Budgets Lack of specificity Math mistakes Cost Allocations between funding sources logic Line items under wrong categories (e.g. contractors listed as staff)

Budget Spread Sheet Uses Establish the fiscal plan projection –Secured Funding –Pending Funding Identify gaps and needs for further fundraising Plan for in-kind and match

Cost Allocation Process of assigning expenses to more than one funding stream Tracking of expenses charged to more than one funding stream

Accounting systems Cash basis Accrual basis

More accounting system considerations Fund Accounting Technology Audits

Financial Statements Measure efficiency Track adequacy of resources Trends –% of total budget –Compare to previous periods Monitor cash flow

Financial Indicators Surplus, deficit Budget to actual Functional Expense Ratios –How much is administrative versus programmatic

Financial Indicators cont. Balance sheet –Shows resources for current expenses Secured funding versus pending request

Financial Reports: Balance Sheet Tracks the following: Assets Liabilities Net worth: –unrestricted assets, –temporarily restricted assets –permanently restricted

What to look for in the balance sheet Does it balance? Are net assets positive or negative? Do current assets exceed current liabilities? Are accounts receivable reasonable? How much of the net assts are restricted? National Economic Development and Law Center

Cash Flow Statement Purpose is to monitor when revenues and expenses are incurred Cash in Cash paid out, disbursed Cash Balance

What to look for in a Cash Flow Statement Is the cash balance positive? Is there a time a year when cash flow is a problem? Is revenue received in a timely, consistent manner? Can the timing of expenses and revenue be improved to increase the monthly cash balance? National Economic Development and Law Center

Financial Statements: Statement of Activities, Budget to Actual Statement of Activities Budget to actual reports –Against current years budget –Historical comparison

What to look for in Statement of Activities, Budget to Actual Does the organization have a surplus or deficit? Are there any actual line items that differ from the projected budget? How does this difference affect the budget? Was this difference approved? National Economic Development and Law Center

Budget to Actual Review: Small Group Activity

Common challenges in Budget to Actual ECC Reports Lack of specificity Failure to fill in all applicable columns Missing grant amendments Math errors

Work session on budgeting – recommended steps Establish time period Estimate revenue sources and amounts Estimate expenditures (linked to strategic plan and work plan for the year) –Fixed expenses –Salary –Program or funder requirements –Everything else