Budget Empowerment and Accountability for Nonprofit Organizations

Transcription

1 Budget Empowerment and Accountability for Nonprofit Organizations A. Michael Gellman, CPA Rubino & McGeehin Chartered CPAs and Consultants Developed under cooperative agreement with HHS, HRSA, HAB Access Ryan White TA at careacttarget.org 1

2 Day Two Overview! Behavioral Based Budgeting Learn how to Use Budgets to Enhance Performance! Critical Budget Considerations 12 Steps of Effective Budget Building! Other Critical Budget Considerations Other Critical Budget Areas Unique to Nonprofit Organizations Common Budget Pit-Falls! Case Study 1a: Nonprofit Budgeting Performance-Based Analysis and Projections! Case Study 1b: Nonprofit Budgeting Building the Budget 2

3 Module 1: Behavioral Based Budgeting 3

4 Module 1 Objective! By the end of Module 1, you will increase your understanding of behavior based budgeting and the techniques and applications that are essential for nonprofit organizations 4

5 Budgeting for Nonprofits! Adopt a: User Based Budget Approach 5

6 WHAT S WRONG WITH BUDGETS TODAY???! Conceptually Budgets are most often viewed as an end product or as a static document This view point is 180 degrees in the wrong direction 6

7 WHAT S IS WRONG WITH BUDGETS TODAY??? continued!budgets should be viewed as an interactive user-based platform that supports today s most advanced managerial systems 7

8 NEW PERSPECTIVE ON BUDGETING!!!!First Step: View budgeting backwards Teach the importance of how to use a budget before how to build a budget 8

9 NEW PERSPECTIVE ON BUDGETING!!!!Why should we teach someone how to ride a bicycle if they have no use for a bicycle? 9

10 NEW PERSPECTIVE ON BUDGETING!!!! Organizational leaders have to get staff and management to buy into the concept that: Budgets Work IF Put to Use 10

11 Glossary of Budget Terms CONCEPTS TECHNICAL! Use! Everyday! Simple! Understandable A Tool for Improvement! Projections! Time is on Our Side! Raise Awareness! Change Behavior Behavioral Based Budgeting 11

12 Financially Are We Ok? What are good questions to ask yourself? 12

13 Financially - Are We OK??? How Am [ I ] Doing? (as a manager) 13

14 Financially - Are We OK??? More Importantly - How are [ WE ] Doing? (as an organization) 14

15 Financially - Are We OK???! To Answer the Question: Goals are the KEY Budgets are critical to managing goals 15

16 Managing Through >>>> Financial Reports! This is How it Works: Raise Awareness Change Behavior EQUALS = Improved Bottom-line Results 16

17 Managing Through >>>> Financial Reports REMEMBER! Re-direct the Budget System to Gear it Towards: EVERYDAY USE 17

18 Everyday Use >>>> Example!Lets Now Look at a Four-Part Budget Application Example 18

19 Budget >>>> Cycles! Budgets From Two Points of View: Process View (traditional budget cycle) Management View (working monthly cycle) 19

20 Budget >>>> Cycles! Process View (budget cycle) Preparation Approval Installation Measurement Projection 20

21 Budget >>>> Cycles! Management View (monthly cycle) Monitor Feedback Override React 21

22 Results Through >>>> Financial Reports! Get: EVERYONE INVOLVED In the Budgeting Process 22

23 Results Through >>>> Financial Reports BUDGETS, NOT A DOCUMENT, A PROCESS 23

24 Results Through >>>> Financial Reports Continued! Make Projections: PART OF THE SYSTEM 24

25 Results Through >>>> Financial Reports! Projections - The Magic View Current Transactions in Terms of Year-end Results A Clearer Picture Achieving Goals through Projections How they Work Projections are Flexible Budgets in Disguise 25

26 Results Through >>>> Financial Reports! History - Has Its Place What Role Does History Play History is FREE History Cannot be Changed Is History a Direct Predictor of the Future NO Can be Misleading 26

27 Results Through >>>> Financial Reports! Paint the Perfect Picture Through: ENHANCED REPORT DESIGN 27

28 Results Through >>>> Financial Reports! Time is the: ENEMY Put Time to Work 28

29 Results Through >>>> Financial Reports! Political Bottom-lines: HAVE A STRATEGY 29

30 Results Through >>>> Financial Reports! Do Not Forget the Three Secret Weapons: Monthly Budgets Projections Contingency Budgets 30

31 Unlocking Results by USING Budgets: A Summary! The Goal: (for your Budget) A WORKING Budget System for EVERYDAY USE that RAISES AWARENESS which CHANGES Staff BEHAVIOR which Equals RESULTS 31

32 End of Module 32

33 Module 2: 12-steps of Effective Budget Building for Nonprofit Organizations 33

34 Module 2 Objective! By the end of Module 2, you will increase your understanding of the 12 steps of effective budget building for nonprofit organizations. 34

35 PARPARING A BUDGET 12 STEPS TO SUCCESS!Step 1: Where Do You start? 35

36 Budget Preparation! Process View (budget cycle) Preparation Approval Installation Measurement Projection 36

37 Budget Preparation! Process View (budget cycle) Preparation Assemble Next Year s Budget 37

38 Budget Preparation! Process View (budget cycle) Preparation Assemble Next Year s Budget When? Mid-year Consider Meeting Schedule, Business Cycle and Funding Sources 38

39 CHART OF ACCOUNTS!Step 2: Analysis of Chart of Accounts and Departments/Projects/Cost Centers Great Results Begin Here 39

40 CHART OF ACCOUNTS! The Starting Point of a Good Budget and Cost Accounting System Natural Accounts Line-Items Accounts Project / Cost Centers Departments / Sub-Departments General and Administrative 40

41 CHART OF ACCOUNTS EXAMPLE CHART OF ACCOUNTS AND DEPARTMENTS / PROJECTS FISCAL YEAR 2004 ACCOUNT # ACCOUNT DESCRIPTION DEPT/PROJ # DEPT / PROJECT DESCRIPTION REVENUE 4010 INDIVIDUAL CONTRIBUTIONS 4020 CORPORATE CONTRIBUTIONS 4030 FOUNDATION CONTRIBUTIONS AND GRANTS 4120 FEDERAL GRANTS 4160 PROGRAM FEES 4400 MISCELLANEOUS INCOME 4500 INTEREST AND DIVIDEND INCOME EXPENSES 5100 GRANTS 6010 ACCOUNTING AND LEGAL SERVICES 6030 BANK CHARGES 6035 COMPUTER SERVICES 6036 COMPUTERS AND SOFTWARE 6037 COMPUTER CONSULTING 6040 CONFERENCE FEES 6050 CONSULTING SERVICES 6070 DELIVERY SERVICES 6080 DEPRECIATION 6100 DUES AND SUBSCRIPTIONS 6110 SPECIAL EVENTS / PROJECTS 6150 EMPLOYEE BENEFITS 6200 EQUIPMENT RENTAL 6250 INSURANCE 6300 LIBRARY / BOOKS / SUBSCRIPTIONS 6350 MAINTENANCE CONTRACTS & REPAIRS 6400 MEALS AND ENTERTAINMENT 6450 MISCELLANEOUS 6460 NEWSLETTER 6500 OFFICE EXPENSE 6600 POSTAGE 6700 PRINTING / PUBLICATIONS 6800 PROMOTION 6900 RENT 7100 SALARIES 7200 TAXES - PAYROLL 7300 TAXES - OTHER 7350 TEMPORARY SERVICES 7400 TELEPHONE 7500 TRAVEL 7700 OUTSIDE COUNSEL 41

42 CHART OF ACCOUNTS AND DEPARTMENTS / PROJECTS FISCAL YEAR 2004 CHART OF ACCOUNTS EXAMPLE ACCOUNT # ACCOUNT DESCRIPTION DEPT/PROJ # DEPT / PROJECT DESCRIPTION REVENUE 4010 INDIVIDUAL CONTRIBUTIONS 100 DEVELOPMENT 4020 CORPORATE CONTRIBUTIONS 120 FUNDRAISING 4030 FOUNDATION CONTRIBUTIONS AND GRANTS 150 SPECIAL EVENTS 4120 FEDERAL GRANTS 4160 PROGRAM FEES 4400 MISCELLANEOUS INCOME 200 EDUCATION 4500 INTEREST AND DIVIDEND INCOME 5100 GRANTS 230 WORKSHOPS EXPENSES 250 CAREER DAY 270 SPECIAL ED PROGRAMS 6010 ACCOUNTING AND LEGAL SERVICES 6030 BANK CHARGES 300 ANNUAL MEETING 6035 COMPUTER SERVICES 6036 COMPUTERS AND SOFTWARE 6037 COMPUTER CONSULTING 400 GRANTS 6040 CONFERENCE FEES 6050 CONSULTING SERVICES 410 YOUTH 6070 DELIVERY SERVICES 430 ADULT 6080 DEPRECIATION 470 SPECIAL ED 6100 DUES AND SUBSCRIPTIONS 6110 SPECIAL EVENTS / PROJECTS 6150 EMPLOYEE BENEFITS 500 PROGRAMS 6200 EQUIPMENT RENTAL 6250 INSURANCE 510 BOOKS TO KIDS 6300 LIBRARY / BOOKS / SUBSCRIPTIONS 520 CLOTHS TO KIDS 6350 MAINTENANCE CONTRACTS & REPAIRS 530 MEALS ON WHEELS 6400 MEALS AND ENTERTAINMENT 6450 MISCELLANEOUS 6460 NEWSLETTER 00 GENERAL AND ADMINISTRATIVE 6500 OFFICE EXPENSE 6600 POSTAGE 6700 PRINTING / PUBLICATIONS 6800 PROMOTION 6900 RENT 7100 SALARIES 7200 TAXES - PAYROLL 7300 TAXES - OTHER 7350 TEMPORARY SERVICES 7400 TELEPHONE 7500 TRAVEL 7700 OUTSIDE COUNSEL 42

43 CHART OF ACCOUNTS EXAMPLE CHART OF ACCOUNTS AND DEPARTMENTS / PROJECTS FISCAL YEAR 2004 ACCOUNT # ACCOUNT DESCRIPTION DEPT/PROJ # DEPT / PROJECT DESCRIPTION REVENUE 4010 INDIVIDUAL CONTRIBUTIONS 100 DEVELOPMENT 4020 CORPORATE CONTRIBUTIONS 120 FUNDRAISING 4030 FOUNDATION CONTRIBUTIONS AND GRANTS 150 SPECIAL EVENTS 4120 FEDERAL GRANTS 151 Spring 10K Race 4160 PROGRAM FEES 152 Fall Gala Dinner 4400 MISCELLANEOUS INCOME 4500 INTEREST AND DIVIDEND INCOME EXPENSES 200 EDUCATION 230 WORKSHOPS 5100 GRANTS 232 Workshops - Youth Series 6010 ACCOUNTING AND LEGAL SERVICES 234 Workshops - Adult Series 6030 BANK CHARGES 250 CAREER DAY 6035 COMPUTER SERVICES 270 SPECIAL ED PROGRAMS 6036 COMPUTERS AND SOFTWARE 275 Sp Ed - HHS Grant 6037 COMPUTER CONSULTING 277 Sp Ed - DOE Grant 6040 CONFERENCE FEES 6050 CONSULTING SERVICES 6070 DELIVERY SERVICES 300 ANNUAL MEETING 6080 DEPRECIATION 6100 DUES AND SUBSCRIPTIONS 6110 SPECIAL EVENTS / PROJECTS 400 GRANTS 6150 EMPLOYEE BENEFITS 6200 EQUIPMENT RENTAL 410 YOUTH 6250 INSURANCE 430 ADULT 6300 LIBRARY / BOOKS / SUBSCRIPTIONS 470 SPECIAL ED 6350 MAINTENANCE CONTRACTS & REPAIRS 475 Sp Ed - HHS Grant 6400 MEALS AND ENTERTAINMENT 477 Sp Ed - DOE Grant 6450 MISCELLANEOUS 6460 NEWSLETTER 6500 OFFICE EXPENSE 500 PROGRAMS 6600 POSTAGE 6700 PRINTING / PUBLICATIONS 510 BOOKS TO KIDS 6800 PROMOTION 520 CLOTHS TO KIDS 6900 RENT 530 MEALS ON WHEELS 7100 SALARIES 7200 TAXES - PAYROLL 7300 TAXES - OTHER 00 GENERAL AND ADMINISTRATIVE 7350 TEMPORARY SERVICES 7400 TELEPHONE 7500 TRAVEL 7700 OUTSIDE COUNSEL 43

44 Responsibility Budgets!Step 3: Assign Areas of Budget Responsibility Who and Where A Budget in Name Only 44

45 Assemble Budget Packages!Step 4: Budget Packages for Staff Use Forms Time-line/Work Plan Financial Reports Sample Data Instructions/Memo from the President 45

46 Document Assumptions!Step 5: Assumption Worksheet Most Important Form Documentation Behind the Budget ITS ALL IN THE DETAILS 46

47 Time-line/Work Plan Step 6: Work plan by Due Dates! Training and Kick-off Meeting! Preparation! First Draft! Budget Interviews! Second Draft! Management Meeting! Final Proposed Budget Ready for Board Presentation! Budget Summary Analysis for the Board 47

48 Training and Meetings!Step 7: Training Individual Group!Step 8: Meetings Group Kick-off Meeting Individual Budget Interviews 48

49 Budget Summary Analysis!Step 9: Prepare Budget Summary Analysis for the Board Highlight: Significant Changes Major Challenges Goals Contingencies 49

50 Approval Process!Step 10: Prepare for the Approval Process: Set Dates Decide Who Will Make the Presentation Staff or Treasurer Script the Presentation Get Budget/Finance Committee Approval Get Board Approval What About Changes? What About Contingencies? 50

51 Installation!Step 11: Load Approved Budget into Accounting System Update Chart of Accounts and Financial Statements 51

52 THE LAST STEP!Step 12: PUT THE BUDGET TO USE EVERYDAY!!!!!!! 52

53 End of Module 53

54 Module 3: Other Critical Budget Considerations 54

55 Module 3 Objective! By the end of Module 3, you will increase your understanding of other critical budget considerations and common budget pitfalls. 55

56 Critical Budget Considerations! In-Kind Contributions! Indirect Costs and the Allocation of Overhead! Contingency Budgets! Cash Flow Considerations and Reports! Forecasting Methods 56

57 Critical Budget Considerations cont.! Estimating Revenue and Expenses! Reserves! Budgets and Link to Strategic Plans! Budgeting for Grants and Awards! Capital Budgets! Budgeting for Salaries 57

58 Common Budget Pitfalls 58

59 COMMON BUDGET PITFALLS #1! Assumption Documentation Not Emphasized No Consistent Methods or Procedures All in the Preparation What-to-Do What-Not-to-Do 59

60 COMMON BUDGET PITFALLS #2! Cash Flow Ignored Misunderstood Needs to be Monitored Closely 60

61 COMMON BUDGET PITFALLS #3! Get Staffed Involved Where? Everywhere Monitoring Budget Reports Building the Budget Ownership Responsibility Accountability 61

62 End of Module 62

63 Module 4: Nonprofit Budgets: Performance Based Analysis and Use 63

64 Module 4 Objective! By the end of Module 4, you will increase your analytical skills and demonstrate an ability to perform critical budget-based performance analysis and make adaptive program/activity decisions. 64

65 Case Study 65

66 CASE STUDY! Non-Profit Budget Analysis: Identify the Key Facts Find the Hidden Clues Real Life Analysis and Problem Solving Derive Interactive Group Based Solutions 66

67 CASE STUDY 1a! How is your Department Performing? Are your Programs/Activities Doing Better or Worse than Expected? Revenue (analysis and discussion) Expenses (analysis and discussion)! Based on your analysis of Current Trends: Propose Projection Changes: Document Your Assumptions Defend your position in front of the Group 67

68 CASE STUDY 1b! What Direction should we take your Department? Split the Department Why? Change Mix Programs/Activities Why? Expand One Program/Activity: List Objectives Document Your Assumptions Assemble the 2009 Budget Defend your position in front of the Group 68

69 End of Module Developed under cooperative agreement with HHS, HRSA, HAB Access Ryan White TA at careacttarget.org 69

70 Nonprofit Organization - Financial "Checkup" (generic document - to be tailored to particular organization) Should be completed at least annually; more often if concerns arise I. Related parties and other sensitive areas Do we have a formal conflict of interest policy? (Attach a copy): What transactions have we had with related parties* (other than the executive director's compensation)? Were they approved by the board, with full knowledge of the relationship and without input from the related party? Has the executive director's total compensation been approved by the board? Who approves board member and executive director travel and entertainment expenses? Are the code of ethics and whistle blower policies both current? II. Internal controls and risks Is there a healthy attitude about internal controls, originating at the very top of the organization? Do we have adequate written procedures manuals for important financial and operational areas? What procedures do we have in place to assure that: All cash receipts are recorded and deposited? Especially contributions? Only proper cash disbursements are made? Restricted resources are used only in accordance with applicable restrictions? Assets are protected from theft? Who reconciles our bank statements, and how quickly? Is this person independent of other cash and bookkeeping functions? Has our auditor made recommendations for improvements in controls? If so, have they been implemented? Updated 2/7/08 Rubino & McGeehin, Chartered, CPA s and Consultants mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB - Access Ryan White TA at careacttarget.org Page 1 of 4

71 How soon after the end of an accounting period is a budget-to-actual comparison made and significant variances (or lack thereof, where expected) investigated? Are projections periodically prepared to make sure the organization is on the right course? Has someone knowledgeable about computers reviewed our computer security? Has someone knowledgeable about nonprofit taxes reviewed our activities for possible exposure? Consider, as relevant: Private benefit, especially compensation Possible unrelated business income and related tax Possible excess lobbying/political activity ((c)(3)'s are not permitted to engage in any political activity) Employee vs. independent contractor status Possible failure to comply with rules related to receipt of gifts (acknowledgement, quidpro-quo, etc.) Public disclosure of Form 990 on request If appropriate, has the organization made the H election related to lobbying For (c)(6) membership organizations, are lobbying percent of dues not deductible as business expenses disclosed? Has a knowledgeable attorney reviewed our activities for possible legal risks? Is there anything about our organization or its operations that we would be embarrassed to read about in the [local newspaper]/hear discussed on the evening news? III. Government grants, etc. (as relevant) Are we following all required sections of OMB Circulars A-110 and A-122 (A-21 for colleges)? Do we have adequate time records to support charges to grants? Are we following acceptable procurement procedures? Are we adequately monitoring subrecipients? Have we filed all required reports on a timely basis? Do you know the accounting system enhancements to conform to government regulations? Updated 2/7/08 Rubino & McGeehin, Chartered, CPA s and Consultants mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB - Access Ryan White TA at careacttarget.org Page 2 of 4

72 Are you aware of: The additional forms required like timesheets and payment request forms? Need to prepare indirect cost rate proposal, 90 days after initial award and 6 months after year-end? That there are agency-specific templates for your indirect cost rate proposal? The requirement for quarterly and annual Financial Status Report, SF Form 269 needs to be filed? The quarterly requirement to reconcile payments received, whether reimbursements or advances, using PMS 272 automated form? Have we had all required audits under Circular A-133? ($500,000 threshold starting CY 2004) Were there any findings? If so, have they been appropriately followed up? Has any government agency challenged any of our procedures or charges to grants? If so has the matter been satisfactorily resolved? IV. Financial reporting and audits Have we received clean (unqualified) reports from our auditor? Are we satisfied that our auditor is independent? How much in non-audit fees have we paid our audit firm? $ Does our auditor understand that (s)he has unrestricted access to the board/audit committee? Has our auditor received a clean peer review report? Have we filed all required government reports (Form 990, state forms, etc.) on a timely basis? V. Other Have we made all payroll tax deposits fully and on a timely basis? (If this is not done, officers and board members can be held personally liable.) Do we carry adequate property and liability insurance? Do we have a directors and officers insurance policy and are we current on premium payments and is the coverage adequate? Updated 2/7/08 Rubino & McGeehin, Chartered, CPA s and Consultants mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB - Access Ryan White TA at careacttarget.org Page 3 of 4

73 Has our board adopted a formal policy on desired levels of operating reserves, and are we comfortable that our reserves are adequate? Have we analyzed cash flows for possible problems and risks? Are By-laws and operating policies adhered to and periodically reviewed and updated? Is there a board orientation for new board members? Are there any chapters, committees, task forces and the like acting on behalf of the organization? Has a code of ethics been adopted? and does it include a conflict of interest policy? Has the investment policy been reviewed and updated? Has a board member reviewed our form 990 to make sure it is complete and tells an accurate story about the activities and operations of the organization? * - "Related parties" include organization officers, directors, trustees, and management in decision-making positions, major donors, and members of the immediate families of any of the preceding; controlled and affiliated organizations and trusts, and businesses in which any of the preceding are in significant positions of authority (owner or manager). Updated 2/7/08 Rubino & McGeehin, Chartered, CPA s and Consultants mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB - Access Ryan White TA at careacttarget.org Page 4 of 4

74 CHECKLIST NFPO S ACCOUNTING & FINANCIAL POLICIES & PROCEDURES MANUAL Fiscal Year 2008 Section(s): 1. CHART OF ACCOUNTS: 1.1. Statement of Position (Balance Sheet) [account codes and descriptions] 1.2. Statement of Activity (Income and Expense) [account codes and descriptions] Programs and Departments (Active Listing) [program and department codes and descriptions] 2. FINANCIAL STATEMENTS AND MANAGEMENT REPORTS: 2.1. Monthly Financial Statements [internal reports prepared monthly] Statement of Position (Balance Sheet) Statement of Activity (Income and Expense 2.2. Monthly Management Reports Budget Worksheets Cash Flow Reports 2.3. Quarterly Board Summary Reports 2.4. Annual Audit of Year-end Financial Statements 3. ACCOUNTING PROCEDURES: 3.1. Processing the Mail [description of this process] Log-in Procedures Distribution Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org

75 Accounting and Financial Policies and Procedures Manual Fiscal Year 2008 Page Cash Receipts [description of this process and procedures] Coding Deposits Accounts Receivable Invoice Acknowledgement Posting 3.3. Cash Disbursements [description of this process and procedures] Coding Accounts Payable Vendor Files Authorization Void Checks Posting 3.4. Payroll [description of this process and procedures] 3.5. End of Month Postings and Reconcilations [monthly close out procedures] Bank Reconcilations Adjusting Journal Entries Update General Ledger 4. FINANCIAL POLICIES: 4.1. Accounting Method [description of accrual accounting] 4.2. Payroll [cross-reference to employee manual] Employee Files Record Keeping 4.3. Bank Reconcilations [authorization, supervision, delegation and approval] 4.4. Insurance Directors and Officers (D&O) General Liability Bonding 4.5. Fixed Assets (Property and Equipment) Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org

76 Accounting and Financial Policies and Procedures Manual Fiscal Year 2008 Page Capitalization Policy [descriptions and thresholds] Depreciation Method [method and years] Disposition and Sale Annual Physical Inventory 4.6. Check Signatures [who and how many] 4.7. Security of Valuable Documents [locked file cabinet procedures] Unused Checks Items for Deposit Files and Documents 4.8. Annual Audit of Financial Statements 4.9. Credit Cards [policies and procedures for issue and use] Investment Policy [how cash is banked and invested] Reserve Policy [accumulate reserves, how and why] Tax Filings Forms [list of filings} Dates Budgets [procedures and timing] Leases and Rents Grants and Contracts Travel Policies Allowed Expenditures Authorized to Travel Reimbursement Procedures Petty Cash Records Retention 5. ANNUAL REVIEW AND APPROVAL OF POLICIES AND PROCEDURES: Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org

77 SAMPLE BUDGET TIMELINE Ideal Start/Prep Time = (Based Around the Third Quarter) Sample Based on Calendar Year: Install New Budget System START HERE!!! June 15 30: o Map Accounting System: Chart of Accounts Departments/Projects/Cost Centers: Programs General and Administrative Fundraising Build Map of Accounting System o Design Initial Budget System Working Templates o Training: Non-Financial Managers: Part I : o How to Use the New Budget System Part II: o How to Build the Next Fiscal Year Budget Accounting Department: Training Installation Existing Budget System START HERE!!! July 1 15: o Close the Month of June o Prepare Six Month Financial Statements o Prepare Six Month Budget and Projection Reports o Assemble Budget Packages: Cover Memo from Executive Director Financial Memo from CFO/Controller/Director of Operations Y-T-D Budget and Projection Reports (Six Months June 30, 200X) Year-End Financial Statements from Prior Year Blank Assumption Forms Blank Budget Summary Template Prepare Sample Assumption Forms for New Managers Copies of Assumption Worksheets from Prior Year Assemble Budget Packages by Person Responsible Prepare Work Schedule/Timeline Sample Budget Work Schedule/Timeline Prepared by: A. Michael Gellman, CPA, Rubino & McGeehin, Chartered, CPA s and Consultants Page 1 of 3 Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org

78 July 16 20: o Final Mid-Year Financial Statements o Final Mid-Year Budget and Projection Reports o Final Work Schedule/Timeline o Schedule Kick-Off Meeting Send Out Kick-Off Meeting Notification to ALL Involved in the Budget Process July 20: o Two-Hour Kick-Off Meeting July 21 August 7: o Managers Assemble First Draft of Budget Selfish Draft o July 28 31: Schedule Mid-Point Status Check-Up Provide Additional Training/Support As Needed o All First Draft Budget Due by Noon on August 7 August 8 14: o Controller Compiles First Draft of the Budget o Assemble Missing Data Report o Assemble Separate Salary Budget Allocation Report Have Executive Director Approve Have Managers Approve Labor Percentage Allocations o Add Labor (Salaries/Benefits/Payroll Taxes) to the Budget o Deliver First Draft of Budget to Executive Director by August 8 August 15 21: o Schedule Meeting with Managers to Discuss Strategies to Balance Budget o Consider the Need for Contingency Budgets o Give Mangers Final Instructions for Preparation of the Second Draft Budget August 22 25: o Managers Re-Draft Budget Assumption Worksheets o Submit to Controller on Rolling Basis o Controller Re-Compiles the Budget August 26 31: o Discuss/Prepare Final Changes to the Budget o Final Staff Prepared Budget Ready for Distribution to Leadership Sample Budget Work Schedule/Timeline Prepared by: A. Michael Gellman, CPA, Rubino & McGeehin, Chartered, CPA s and Consultants Page 2 of 3 Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org

79 September 1 15: o Schedule Leadership Distribution to: Treasurer Audit Committee Finance Committee Executive Committee o Prepare Budget Backgrounders Explaining Major Areas of the Budget Highlights Major Variances Important Points of Reference September 16 30: o Distribute Budget to Above Leadership o Attend Meetings and Make Budget Presentations o Document Possible Budget Changes o Prepare Final Budget for Board of Director Approval October December: o Present Budget at Board of Directors Meeting o Obtain Board Formal Approval Board Motion Document in Board Minutes Sample Budget Work Schedule/Timeline Prepared by: A. Michael Gellman, CPA, Rubino & McGeehin, Chartered, CPA s and Consultants Page 3 of 3 Rubino & McGeehin, Chartered, CPA s and Consultants, mgellman@rubino.com Developed under cooperative agreement with HHS, HRSA, HAB, Access Ryan White TA at careacttarget.org