X Lerant Presentation On Integrating Strategy And Budgeting Pdf
PDPM Budgeting Presentation
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Transcript of PDPM Budgeting Presentation
P D P M | A . H I L LO C K & B . F I S C H E R
BUDGETING BASICS
BASIC PRINCIPLES
• A budget should • Directly reflect organization’s
mission & priorities• Chart a direction for allocating and
maximizing use of resources• Tend to history of finances and
future projections• Futurity through rolling budgets
• Be tailored according to the scope & size of program/project
• Be compared to actual performance of projects• Allows staff to isolate
gaps/misdirected funds
EFFECTIVE BUDGETING
An effective budget is
• Realistic• Consistent• Flexible•Measurable
• Should plan for Short vs. Long Term Investments
PREPARING A BUDGET
• Determine programs & activities for the budget period• Budget expenses and revenues• Based on historical data, forecasts &
economic climate
• Develop a draft budget• Include previous yr budget, current yr and
cash flow
• Review/modify your draft• Have board review and approve• Revise if necessary
• Monitor and record budget activity
CASH FLOW VS. PROGRAM BUDGET
Cash Flow for monitoring the variance between projected and actual income / expenses on a recurring basis (usually monthly)
(BOOK KEEPING)
Program Budget Gives detailed costs of every activity or input that goes into program objectives, noting dates of fund disbursement
(BUDGETING)
CASH FLOW PLANNING
• Difficulties• Volatility, Unpredictability (esp. with Disaster Relief)
• How to• Account for cyclical and seasonal fluctuations in cash
inflow / outflow• Adjustments made when cash inflow less than outflow• May call for postponing expenditures/accelerating client
billings
• Plan for lags between invoicing/billing for services and actual receipt of cash
• Chart expenditures according to payment deadline• Factor in debt repayments
WHERE TO START WITH A CASH FLOW
Zero-Based
• Starts from 0, assuming no program is necessary and no money spent• Orderly evaluation of
all revenues and expenses• Aim is for quantitative
measurability
Incremental
• Assumption is programs and depts. are pre-approved
• Only increases and decreases in resources allocated
• Focus on changes since previous FY numbers
• Less focus on rigid calculations
ADDITIONAL BUDGET REPORTS
• Annual, quarterly or monthly projects of income and expenses• For entire organization, its divisions and depts.
• Revenue projections by type • Donations, gifts, grants, etc.
• Individual project and dept. projections• Service delivery costs• ie. cost per patient/beneficiary
• Cash flow – short and long term• Historic and project fund-raising revenue & expense• Staffing models
NON-PROFITS
• Flexibility!• Contingency plans
• Lead-time for grant requests• multi-year programs, etc.
• Unpredictable cash flows & contribution revenue• Can be dealt with by postponing expenditures,
accelerating constituent billings
• Money allocated appropriately*• Under common law, non-profits have a duty to
donors/grantors to use gifts for the purpose the funds were given
LEAN, ADAPTABLE & ETHICAL
• Transparency & sustainability • Priorities in balance reflect priorities of the
organization• Bear in mind the needs of the beneficiaries and
stakeholders• Reporting mechanisms built in to alert management of
cause for change
• Budget inherently a “push mechanism,” but should also be “pulled” by beneficiaries/stakeholders• Should not only set ceiling prices, but also floor
prices
OTHER CONSIDERATIONS
• As much money as possible in federally insured, interest bearing accounts• Once cash reserves exceed operating costs,
consider longer-term investments • Staff increases, technological investments
• Budget spreadsheets often, requested by third-party stakeholders / [potential] donors• Tracking of expenditures enhances ability to
report accomplishments