1. Budgeting Civil Air Patrol National Board 4 September 2009

2. Budgeting is the organization’s operating plan for a fiscal period. CAP must demonstrate accountability and stewardship of donated resources as well as develop financial plans which support our missions. What is a Budget?

3. Making the Case for Budgeting Why should nonprofit organizations create budgets? Manage resources more effectively Set programmatic goals through finance Budgeting is planning

4. Budgeting Budgeting is a requirement mandated in the new finance regulation Wings/units will be required to maintain a balanced budget Wings/units will be required to maintain a balanced budget QuickBooks has budgeting functionality QuickBooks has budgeting functionality

5. Types of Budgets Organizational budgets Organizational budgets Project budgets (ex: Region Conference) Project budgets (ex: Region Conference) Capital budget (new hangar) Capital budget (new hangar) Grant budgets Grant budgets Fundraising budgets Fundraising budgets

6. Budgeting Methodologies Zero based budgeting Budgeting method in which all amounts must be justified each year, not just increases Budgeting method in which all amounts must be justified each year, not just increases Objective budgeting Allocating funds to pre-determined objectives Allocating funds to pre-determined objectives Bottom up budgeting Budgets prepared by directors are combined to determine resource needs Budgets prepared by directors are combined to determine resource needs Percentage or incremental increase Prior year budget is modified by a set percentage Prior year budget is modified by a set percentage

7. Characteristics of a Sound Budget Budget must be flexible. Budget should be modified as requirements change Budget must be realistic. Budget should be created based upon sound assumptions Budget must be consistent. Budget should support CAP’s strategic plan, goals, and mission

8. Where do you start? Revenue Analyze sources of income Analyze sources of income Obtain membership numbers from NHQ Obtain membership numbers from NHQ Review prior year Review prior year

9. Program Expenses Directors (Logistics, Operations, etc,) should identify their anticipated program requirements Review current year actual expenses Review current year actual expenses Evaluate new objectives Evaluate new objectives Budget request should be presented to the Finance Committee for consideration Budget request should be presented to the Finance Committee for consideration Finance Committee should consider “overhead” operating costs

10. Budget Consolidation Finance Committee should evaluate funding requests from various departments as they build a consolidated budget Frequently, initial budget requests will exceed projected revenue Finance Committee evaluates requests and prepares the final consolidation

11. Amending the Budget A budget is a planning document, not a guarantee of funding nor an authorization to procure goods and services A budget is a planning document, not a guarantee of funding nor an authorization to procure goods and services Changes in plans, new program requirements, under execution of events, etc., will require budget amendments Changes in plans, new program requirements, under execution of events, etc., will require budget amendments Finance Committee should review the budget frequently and amend the budget as events change and new funding requests are received Finance Committee should review the budget frequently and amend the budget as events change and new funding requests are received

12. Budget Review Finance Committee members should be provided with current budget execution reports monthly if not more often Finance Committee members should be provided with current budget execution reports monthly if not more often Budget execution should be considered and discussed at least quarterly Budget execution should be considered and discussed at least quarterly

13. Year End Review Finance Committee should review the final budget to actual report after the close of the fiscal year Finance Committee should review the final budget to actual report after the close of the fiscal year Budget execution and analysis are important considerations in evaluating program accomplishments Budget execution and analysis are important considerations in evaluating program accomplishments

14. Budgeting in QuickBooks® Prepare draft budget for finance committee to discuss, change or approve Prepare draft budget for finance committee to discuss, change or approve Can be basic budget or detailed Can be basic budget or detailed

15. Basic Budget Income & expense in general detail Income & expense in general detail Follows chart of accounts Follows chart of accounts Cannot budget for missions Cannot budget for missions

16. Detailed Budget Department budgets Department budgets Cadet Programs details supplies, printing, lodging, travel, fuel, etc. Cadet Programs details supplies, printing, lodging, travel, fuel, etc. Office Supplies broken out to departments Office Supplies broken out to departments General, Commander, AE, IG, FM, OPS General, Commander, AE, IG, FM, OPS Activity budgets detail types of expenses Activity budgets detail types of expenses lodging, food, transportation lodging, food, transportation

17. QuickBooks Enter budget in any way the wing wants to track expenses. Enter budget in any way the wing wants to track expenses. Enter by account Enter by account Enter by detail—activity or department Enter by detail—activity or department Consider how the finance committee wants to review. Consider how the finance committee wants to review.

18. QuickBooks Enter budget prior to 1 October so you are ready Enter budget prior to 1 October so you are ready Ensure income and expenses are coded appropriately to follow the budget Ensure income and expenses are coded appropriately to follow the budget Print budget report as often as needed Print budget report as often as needed Send to finance committee Send to finance committee Send to department directors Send to department directors Send to activity directors Send to activity directors

19. Questions?