Managers need financial information to help them make decisions, communicate important information about their organization, and demonstrate fiscal responsibility to stakeholders. The purpose of this assignment is to familiarize you with preparing and justifying budgets. This assignment will count for 20% of your final grade.
This assignment requires the use of simple functions in Excel and you should take advantage of these basic formula capabilities. For example, features like the SUM formula and the "insert sheet" button (for presenting multiple worksheets) will be useful for completing the assignment. See the Excel Tutorial above for help in remembering these formulas.
Scenario: Imagine you are the manager of an information resource center in a mid-sized "parent" organization. Some examples of information resource centers could be: a medical collection in a hospital; a special library in the research & development section of a pharmaceutical company; an archive in a museum; a genealogical collection in a historical society; a school media center in an elementary or high school; a rare book collection in a university library; a business information service in a public library, etc.
Users/Services: Information resource center users can include organization staff and external users or clients. Currently users and/or clients come into the resource center and ask for material to be sent to them or they ask for quick answers to simple research or reference questions over the telephone and through email. The center staff provides a weekly email news briefing covering items of interest to its users and/or clients. Additionally, center staff collects user data, makes a list of answers to frequently asked questions based on that data, and updates the FAQs regularly.
Collection: The center has a basic reference collection and a number of subscriptions to online information resources. If anybody needs highly specialized information, the cost of procuring that information comes out of the parent organization's budget, not from the center, even though the center's staff may identify and procure the specialized information. New reference material is purchased if it is of general interest or the current material is out of date.
Staff: Center staff includes: one full-time information professional, one part-time para-professional, and one full-time clerical assistant.
Budget: The current year operating budget for the center is shown below:
Subscriptions and books $ 156,000.00
Supplies (including photocopies) 9,300.00
Phone, fax, postage 4,500.00
Staff travel 1,200.00
Fringe benefits @ 38% of salaries 40,812.00
Organizational overhead @ 21% of non-salary expenses 35,910.00
Assignment: As part of the newly revised budget process, you have been asked to demonstrate how the center is contributing to the overall organizational mission by developing a program budget for the resource center that ties expenditures to program goals. To do this, you will need to 1) define a set of appropriate goals for the resource center; 2) identify the resource center programs/services that support these goals; and 3) determine how the direct and indirect costs should be allocated among these programs. Your goal in presenting your budget is to make the best case you can for the programs/services you need to provide-this involves showing that the resources you are requesting are allocated in the most cost-effective manner possible.
Next, you need to develop and justify an allocation for a new service or product and prepare a preliminary cost benefit analysis for this new service or product. Finally, as part of the budget process you have also been asked to suggest appropriate salary increases for the staff. You must support all your recommendations.