Designing a Budget Making it work without working too hard 1

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 2

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 3

Federal & State Regulations Allocable to the project Necessary and Reasonable Administrative Cost Limits Supplement not Supplant Indirect Cost Rates Matching & Other Funds Put it in writing 4

Regulations: Allocable to the Project (What you are allowed “purchase”) Example: Instructor salaries – what hours can you pay with ABE funds? NOT Allocableteaching college calculus 101 IS Allocable teaching ABE math class 5

Regulations: Necessary & Reasonable (How much you are allowed to spend) Necessary, not Reasonable 500 math students1,000 math textbooks Reasonable, not Necessary 500 math students500 reading textbooks Necessary AND Reasonable 500 math students500 math textbooks 6

Regulations : Administrative Cost Limits (How much you can spend on administration*) No more than 5% on: Planning Administration Personnel development Interagency coordination *Federal Funds only 7

When you can replace a state or local $ with a federal $. Reoccurring, fixed (salaries, rent) Supplant One-time, variable (travel, textbooks) Supplement Regulations: Supplementing & Supplanting 8

FTPs – What they are: FT – full time = 2080 hours per year. P – position = duties, activities, responsibilities FTPs – Why they matter: Supplanting is based on duties, not on people Regulations: Supplementing & Supplanting. 9

Regulations: Matching & Other Funds What are the requirements for your school? Matching Matching levels are recorded for the State only, not locally. Other Funds Local programs should still be supported by their institution and these funds should be reported. 10

Regulations: Indirect Cost Rates (How much can you pay of your school’s general expenses?) 0% 11

It isn’t official if it isn’t in writing. Telephone, Not official Hard copy, letterhead Official Regulations: Put it in Writing 12

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 13

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 14

Essential Items & Services 1.“What need are we meeting based on the data & our target population?” 2. “What is our estimated level of service to meet this need?” 3. “What is the bare minimum we require to provide those services?” 15

Examples: Class schedule Facilities Instructors Compliance items Essential Items & Services 16

An Example Core Budget Plan Total estimated for Essential =$5,500 Salaries - $3,000 Facilities - $1,500 Travel - $ 500 Supplies - $

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 18

Secondary Items & Services Secondary Items and Services should: Support a need or strategy Be well planned Be prioritized 19

Examples: New Computers Pilot Project for a new curriculum Additional training Expanding the class schedule New class locations Secondary Items & Services 20

An Example Budget Plan Total estimated for Essential =$5,500 Salaries - $3,000 Facilities - $1,500 Travel - $ 500 Supplies - $ 500 Total estimated for Secondary=$2, Pilot Curriculum Project - $1, New Computers - $ Additional Training - $

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 22

Resources - $6,500 Total estimated for Essential =$5,500 Salaries - $3,000 Facilities - $1,500 Travel - $ 500 Supplies - $ 500 Remaining - $1,000 Total estimated for Secondary=$2, Pilot Curriculum Project - $1, New Computers - $ Additional Training - $

Overview Federal & State Regulations Planning for your budget – Essential items & services – Secondary items & services – Resources Using your budget – Checking progress – Looking for problems – Thinking ahead 24

Checking Progress Look at your reimbursement requests each month and ask yourself: Are we spending our money the way we planned? Will we have too little, too much, or just enough? What does this tell us about our plan? 25

Identify Problems After you’ve evaluated your progress, ask yourself: Has our actual spending differed from our budget plan, and if so, how? Will we run out of money in any area? End up with excess? Will we need to make adjustments to keep on track? 26

Thinking Ahead You can use the previous year’s budget plan if you do the following: Evaluate how well the plan worked Identify specific problems Address those problems Incorporate changes 27

Conclusion A well designed budget helps you: Effectively target your resources to your needs Understand your progress during the year Evaluate and learn for the future 28