1. 1 Determining Costs for Activities Funding is usually a resource constraint. It’s important to include accurate cost estimates for each of the activities of a census/survey program.

2. 2 Costs associated with a Quality Assurance Program: 1. Personnel costs during production 2. Training costs 3. Equipment and supply costs 4. Travel costs 5. Supervisory costs

3. 3 Personnel Costs: Operation takes 14 8-hour days and the pay rate is $4 per hour, what is the salary for one worker to complete this operation? 14 days x 8 hours x $4 per hour = $448

4. 4 Personnel cost example: Want to complete coding in 10 days, can only work one shift per day, how many hours available to complete the coding? 10 days x 8 hours per day = 80 hours If we have 4,000,000 questionnaires and the average rate of work is 40 questionnaires per hour, how many people will I need? 4,000,000 questionnaires divided by 40 questionnaires per hour divided by 80 hours = 1,250 people

5. 5 The pay rate for coders is $5 per hour and we are providing $2 per day for transportation costs, how much will we have to pay the coders during the coding operation? [($5 per hour x 80 hours) + ($2 x 10 days)] = $420 per worker $420 x 1,250 people = $525,000 Personnel production cost:

6. 6 Personnel training cost: There will be two days (16 hours) of training for the coders, they will be paid the same rate ($5 per hour) and given ($2/day for transportation), how much will the training cost? [($5 x 16 hours) + ($2 x 2 days)] x 1,250 persons = $105,000 for training Total personnel costs for coding of 4,000,000 questionnaires in 10 days now equals $630,000

7. 7 Calculate personnel drop out in your training costs: Over-training rate of 10% of total coders needed.10 x $105,000 (training) = $10,500 (over-training) $525,000 production cost $105,000 training cost $ 10,500 over-training cost $640,500 Total coding operation cost

8. 8 Coding Verification Cost: Two-way independent verification less expensive relies on one person to be impartial in their review of the production clerk Three-way independent verification more expensive increase accuracy since there are two review processes: independent verification and matching.

10. Verification cost worksheet:

11. 11 Verification Cost Worksheet: The total cost is dependent upon: 1. Workload 2. Average work rate 3. Time allotted to complete the task 4. Training requirements 5. Type of verification From this information we can calculate: 1. Number of personnel needed 2. Production costs 3. Travel and Training costs 4. Verification cost

12. 12 Total coding operation cost: $525,000 production cost $105,000 training cost $ 10,500 over-training cost $ 37,800 two-way matching cost $678,300 Total coding operation cost

13. 13 BUDGETING The development of detailed cost estimates for each activity to prepare a realistic estimate of the total cost of the project

14. 14 USES OF THE BUDGET Estimate types of costs and amount required Provide prospective donors with an idea of the expected resources required Provide guidance for decisions on expenditures Help in measuring progress

15. 15 CHARACTERISTICS OF A BUDGET Reflects overall plan of operation in detail Based on carefully established estimates of workloads, rates of production, and personnel Includes the cost of all equipment, facilities, and supplies Must take into account all known factors which may have an impact on future costs Prepare for each operation in detail on a fiscal year basis

16. 16 1. What are the effects of underestimating costs when preparing a budget? 2. What are the effects of overestimating costs when preparing a budget?

17. 17 DONOR REQUIREMENTS 1. What types of activities and costs are they likely to fund? 2. What budget formats do they prefer? 3. What is their fiscal year cycle? 4. What currency do they use?

18. 18 SUMMARY VERSUS DETAILED BUDGET A summary budget presents subtotals for the major cost categories. It allows one to tell at a glance the relationships among items. A detailed budget shows how these subtotals were calculated for the major items.

19. 19 Using Excel to Create and Manage Budgets Using the instruction sheet, you will now estimate the costs for the activities in your schedules and enter your budget into Excel