planning and budgeting. financial planning the success of a program does not only depend on whether...
TRANSCRIPT
PLANNING AND BUDGETING
Financial Planning
The success of a program does not only depend on whether it meets its objective and goals but also on whether it does so financially.
Financial Organization
A budget should reflect sensitive planning that responds to the input of the staff.
It is essential to have one person who has overall responsibility for financial management
Financial Organization
The structure of the organization will determine
who is responsible for various aspects of financial management
The number of people who will contribute to budget development, implementation, monitoring, and year end analysis
Strategic Planning
Characteristics The planning horizon should relatively be
short The procedure should encourage the
participation of outside parties to improve the reliability and creativity of the resulting plan
Strategic Planning: Process
• Develop a clear mission statement• Assess the schools strengths and
weaknesses• Conduct a thorough market analysis• Analyze Competitors• Create company goals and objectives• Formulate strategic options and select
appropriate strategies• Translate strategic plans into actions• Establish accurate controls
Forms of Ownership
Sole propriertorship Partnership Corporations
Sole proprietorship
Owned and managed by one individual
Advantages: Simplicity in creation The owner has total Decision-making
authority• There are no special legal restrictions• Easy to discontinue
• Disadvantages
• Unlimited personal liability• Limited Skills and capabilities• Limited access to capital• Lack of continuity in the business
Partnership
Two or more persons who engage in business as co-owners for the purpose of making a profit
Co-owner share assets and liabilities, and profit
Types of Partners
General partners Limited partners
Secret partners Honorarium partners
Advantages Easy to establish Division of profits Larger pool of capital Ability to attract limited partners
• Disadvantages• Unlimited liability of at least one partner• Capital accumulation• Difficulty in disposing partnership
interest without dissolving partnership• Lack of continuity• Potential for personality and authority
conflicts• Partners are bound by the law of agency
Corporations
It is a separate entity apart from its owners
The owners are called shareholders
Advantages Limited liability of stockholders Ability to attract capital Does not depend on the fate of any
single individual Transferable ownership Larger pool of skills, expertise, and
knowledge
Disadvantages Cost and time Taxation Potential for diminished managerial
objectives Legal restrictions and regulatory red
tape Potential loss of control by the founder of
the organization
Incorporation
In 1982, all schools that are incorporated are supposed to be registered at the SEC as non-stock non-profit organizations.
The school owns itself but is not owned by individuals
Members of the Corporation
At least 5 but not more than 15 natural persons.
who must be of legal age
Foundation Can take effect only after The shares of the stockholders have been
conveyed To the corporation The filling of the office of the SEC of the copy
of the stockholdres resolution duly certified by the governing board
The filing with the office of the SEC the certificate by the board of trustees of the foundation as to conveyance and conversion of the stock corporation into a foundation
Different Kinds of Budgets
Start-up budgets Capital budgets Operating budgets
Start-up budgets
Designing, or consulting with other professionals on the design of the physical spaces
Identifying and making recommendations on the selection and purchase of equipments, furnishings, materials, and supplies
Developing job descriptions
Developing the beginning philosophy, and program objectives, to be later refined and adapted by the program staff and management
Developing the initial administrative forms and procedures
Cooperating with other professionals Reviewing current child care legislation
Capital Budgets/Capital Expense• Annual operating budgets• Land costs building costs• Additions to existing buildings• Renovations or alterations to existing
buildings• Equipment and furnishings• Outdoor creative playgrounds• Fencing• Playground landscaping
Operating Budget/Operating Costs Anticipated costs during the fiscal year Information is projected from the best
information collected from other center experiences
These are projected costs for a new operation
These must clearly reflect any changes or new directions in the center
Expenditures/Income
Fixed Costs Variable costs Semi-variable costs
Operating Budget- Item by Item Staff Costs Benefits Consultants Professional Development and in-service
training
Budget Item by ItemNon-staff• Mortgage/rental and loan payments• Property taxes• Business taxes• Maintenance and repairs• Depreciation on building, equipment,
and furnishings• Utilities• Insurance• Ground maintenance
• Food *• Educational equipment• Educational supplies• Teacher resources and membership in
professional organization• First-aid• Housekeeping supplies• Office supplies and equipment• Special programs• Field trips and travel
Advertising, postage, and courier Audit and bookkeeping fees Legal expenses Bad debts and low enrollments Miscellaneous
A budget item by itemIncome The line expenditures in the budget are
balanced by the income side. Once expenditures have been
determined, the sources of income are evaluated and the fees established.
The actual fee charged should be higher than the exact formula amount, to allow some income over expenditures as a buffer or contingency fund.
Any money left from the fiscal year is borught forward as an income next budget year
Balancing the budget
The total of the income column and the expenditures column should be expressed in terms of income over expenditures
Conclusion
Understanding, planning, and monitoring financial matters of an early childhood setting is the primary responsibility of the board or owner, administrator, or supervisor.
Nonetheless the staff needs to understand how budgets are developed and the implications that they have for the quality of the center’s overall operation.
Location, Layout, and Physical Facilities Proximity to market Population trends
Physical Environments
Developmental needs of children Demographics change, centers are faced
with shifting enrolment demands Focus on Safety
Designing Space for Infants
Make them feel secure Stimulate them through varying levels of
challenge Secure and comfortable places An environment where supervision is easy Quiet areas and spaces to be alone Encourage and support group interactions Room allows a wide range of movement
Toddlers
Security of some defined space Flexibility of large areas Prefer large toys They test their bodies
Preschoolers
The layout of the room should generally reflect program goals and expectations, giving behavioural cues to children
Clear definitions of play areas, so allow a clear space for children, with open areas where they can use their bodies to enhance their involvement
The arrangement of the space dictates the level of teacher involvement needed for children in all care setting help children remember the expectations for inside play