In this assignment, learners are required to create staffing and operating budgets for Play-Outside. To create the staffing and operating budgets learners will need to identify cost, understand how changes in costs affects decisions, and explain the budget decisions they make. Learning Outcomes Identify the role of budgets in planning and decision-making and apply the budgeting process. Prepare labor and selling, and administrative expense (operating) budgets. Background Information Play-Outside is a not-for-profit organization that develops and maintain playgrounds and sport fields in neighbourhoods with no or disused playgrounds or fields. Play-Outside has been operating since 1987. Play-Outside's mission is to help put smiles on the faces of children and build a better future, one playground at a time. During the 30 years of operation, Play-Outside has developed 43 playing fields and 22 playgrounds. Play-Outside maintains playing fields for 10 years and afterwards a local community organization takes over maintenances. Every year new projects are submitted, but with limited resources only 2 new playgrounds and 2 sports fields can be developed. Volunteers carry out the majority of the work. The paid staff oversee the administration of external grants, project applications, maintenance schedules and volunteers. With the growing number of projects and volunteers, Play- Outside is looking to hire a new Volunteer Assistant. Play-Outside's revenue is from projects grants from the different levels of government and corporate donations. The operating expenses and some project costs are from an anonymous donor and fundraising donations. Not all project costs are covered by the project grants. The task is to create the 2020 budget for Play-Outside from the guidelines provided by the Chief Financial Officer. Along with the 2020 budget, you are asked to include the justifications for your budget decisions. Play-Outside's fiscal year is January to December. Project length and format: Assignment can be done individually or in groups no bigger than 3 people. Email the name and student number of your groups members to Ms. Colleen no later than Wednesday, November 17 at 1:30pm. Submit Answers to questions 1 to 7 Annual Staffing and Operating Budgets using the template provided in Exhihits C and D Your answer should be no more than 4 pages and include answers to the questions, completed Exhibit C and Exhibit D. As a guide this page has 223 words. Round to the nearest whole number. Questions: 1. Introduce Play-Outside's current situation and identify their challenges. Use the background information, Exhibit A: Memorandum and Exhibit B: 2019 and 2020 Budget. 2. Create the 2021staffing budget that does not total more than $242,500 than $248,000 and includes the 2.5 current positions, the new position, annual increase and benefits. Use the template in Exhibit C. (Total of 3.5 positions in the 2021 budget) 3. Create 2021 Operating budget using the template in Exhibit D. It can not exceed $49,325 and must include all the changes from Exhibit A Part B. Operating Expenses. 4. Identify budget items that can be reduced or increased. What decsison did you have to make. 5. Evaluate of each budget item using quantitative and qualitative factors. How did you make your decisions. 6. Rank recommendation budget item changed based on your evaluation. Why did you make these decisions you did. 7. Provide a recommendation on Tell me what you changed. a. The annual salary for the Volunteer Coordinator b. Changes in the operating budget. Items you would decrease or increase. c. Explain how your recommendation is feasible, practical, result orientated, and resolves major challenge. EXHIBIT A Memorandum From Chief Financial Officer To Project Group Manager Re 2021 Budget Preparation Guidelines The 2021 budget for the Play-Outside's Project Group needs to be prepared using the following guidelines. A. Staffing Budget There up has 2.5 staff position, the Manager position is shared with another department. Your request for a Volunteer Assistant position has been approved for 2021. The annual salary can be between $42,000 and $47,000 per year plus benefits. The position will start on January 1st. 2020 Salaries for current position Manager (50%) -- $32,500 plus benefits Coordinator -- $55,000 plus benefits Administrative Assistant -- $45,000 plus benefits The benefit rate is 39% In 2020 all current employees will receive a 3% increase, as of January 1, 2021 The total staffing budget cannot be more than $248,000 for all 3.5 position for 12 months (1 year) B. Operating Budget The Project Group's Actual results for 2019 and 2020: Description 2020 Actuals Total Revenue $ 48,672 Total Expenses $ $ 46,573 Budget Surplus (Deficit) $ $ 2,100 Exhibit B shows the full Operating Budget results. Addition Information: $ 2019 Actuals 46,013 45,813 200 The 2021 budget cannot be in deficit (a negative amount) or in a surplus of more than $2,500. Revenue comes from rentals of the 3 sports fields. o Rented for $10/ hour o Available 8 hours every day 6 days/week. o Current rental rate is at 65% of the available time. Changes to Project Groups Expenses: The new Development Project for 2021 will cost between $20,000 and $25,000 New marketing and outreach is approved to increase by $2,500 Inflation in 2021 will increase expenses by 4%, expect for the lease annual fees. The computer for the new position will be $225 / year. The following expenses cannot be reduced: o Field and playground maintenance fees o Field and playground development fees Annual fees o Exhibit B - Project Group Actual Expenses for 2019 and 2020 Project Group Actual Expenses 2019 2020 Sales Rental Revenue $46,013 $48,672 $46,013 $48,672 Expenses Maintenance projects $10,500 10,750 Development projects 16,400 16,650 Office Supplies 3,200 2,800 Printing 350 750 Marketing presentations and outreach 4,800 5,200 Miscellaneous expenses 2,000 1,860 Lease for printers and copiers (annual fee) 8,000 8,000 Lease for computers ($225 annual fee) 563 563 $45,813 $46,573 Budget Surplus (Deficit) $200 $2,100 Total Revenue Total Expenses Exhibit C - Annual Labor Budget Annual Labor Budget with 2020 Actuals 2021 Budget Employee Expenses Manager (50%) Coordinator Administrative Assistant Volunteer Assistant -- New Salary Totals Benefits Manager (50%) Coordinator Administrative Assistant Volunteer Assistant -- New Benefits Totals Labor Budget Total 2020 Actuals 32,500 55,000 41,000 128,500 12,675 21,450 15,990 50,115 178,615 2021 Budget Exhibit D- Operating Budget 2021 Annual Operating Budget Description Sales Rental Revenue Total Revenue Expenses Maintenance project Development projects Office supplies Printing Marketing presentations and outreach Miscellaneous expenses Lease for printers and copiers (annual fee) Lease for computers ($225 annual fee) Total Expenses Budget Surplus (Deficit) 2020 Actuals 48,672 48,672 10,750 16,650 2,800 750 5,200 1,860 8,000 563 46,573 2,100 2021 Budget EXHIBIT F Memorandum From: Chief Financial Officer To: Project Group Manager Re: Additional grant for a new project The municipality has announced that Play-Outside will receive funding to build an additional park this fiscal year. The funding will cover all cost of the project as well as 10% to cover administrative costs. The grant revenue is $13,200 = $12,000 for the park and $1,200 for additional administrative costs. The full amount of the grant funds have to be spend the 2021 fiscal year. Update the 2021 Operating Budget with this new information. Question 3 budget limit of $49,325 no longer applies. Remember that the 2021 budget cannot be in deficit and the total surplus cannot be more than $3,500. Added the new revenue and project to Exhibit D before submitting it.