Case Study 5: Adjusting the Budget

Agency XSS has been doing well financially but wants to provide more services to its clientele. They recently applied for a grant from The New England Health Foundation (NEHF) for $1,000,000 to provide these services. NEHF has heard that there has been some mismanagement at the agency and some of the foundations board are not assured that the money will be spent appropriately. However, the foundation is willing to gamble on the agency because of its past success. The Foundation has indicated that they are interested in funding Agency XSS but can only provide $850,000 of the requested funds ($150,000 less than requested).

NEHF has requested a full descriptive budget of the service that will be provided and the cost of each item the funds will be allocated for in terms of Personnel and Other than Personnel Services (OTPS). They are requesting a detailed budget and budget narrative by the end of the work week. To be sure of the veracity of Agency XSS in getting this money, they want to see the original budget alongside the updated line by line budget showing where Agency XSS will get the additional $150,000 to cover the cost that the Foundation will not pay for.

Assignment

The type of services to be provided will be up to you, the department manager. Who your collaborators are (if any), where you get the other funding, and how you structure your program will be up to you. Be creative. You should do some research on approximate cost of items in your budget to make the budget as realistic as possible. Attach or refer to (cite on a reference page) anything you used to justify your costs (e.g., Office Max for cost of a desk, Toyota Leasing for a leased vehicle, Progressive for car insurance, etc.). Some things can be fungible/estimated (e.g., how much office supplies you will use for the year). Use the Excel spreadsheet to do your budget and narrative. The headings on the spreadsheet are suggestions, with the exception of NEHF, who are the funders for this grant. Make sure you have a narrative that does the math to show how you arrived at your cost for every item even in-kind costs. The A&G for the fiduciarys administrative cost is a fixed cost set at 10% of the budget (i.e., $85,000 for the new budget and $100,000 for the original budget). Check the Bureau of Labor Statistics for average salaries by industry for estimated personnel costs.