Budgeting

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• Budgeting
• Civil Air Patrol National Board
• 4 September 2009

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What is a Budget?

• Budgeting is the organizations operating plan
  for a fiscal period. CAP must demonstrate
  accountability and stewardship of donated
  resources as well as develop financial plans
  which support our missions.

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Making the Case for Budgeting

• Why should nonprofit organizations create
  budgets?
• Manage resources more effectively
• Set programmatic goals through finance
• Budgeting is planning

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Budgeting

• Budgeting is a requirement mandated in the new
  finance regulation
• Wings/units will be required to maintain a
  balanced budget
• QuickBooks has budgeting functionality

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Types of Budgets

• Organizational budgets
• Project budgets (ex Region Conference)
• Capital budget (new hangar)
• Grant budgets
• Fundraising budgets

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Budgeting Methodologies

• Zero based budgeting
• Budgeting method in which all amounts must be
  justified each year, not just increases
• Objective budgeting
• Allocating funds to pre-determined objectives
• Bottom up budgeting
• Budgets prepared by directors are combined to
  determine resource needs
• Percentage or incremental increase
• Prior year budget is modified by a set percentage

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Characteristics of a Sound Budget

• Budget must be flexible. Budget should be
  modified as requirements change
• Budget must be realistic. Budget should be
  created based upon sound assumptions
• Budget must be consistent. Budget should support
  CAPs strategic plan, goals, and mission

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Where do you start?

• Revenue
• Analyze sources of income
• Obtain membership numbers from NHQ
• Review prior year

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Program Expenses

• Directors (Logistics, Operations, etc,) should
  identify their anticipated program requirements
• Review current year actual expenses
• Evaluate new objectives
• Budget request should be presented to the Finance
  Committee for consideration
• Finance Committee should consider overhead
  operating costs

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Budget Consolidation

• Finance Committee should evaluate funding
  requests from various departments as they build a
  consolidated budget
• Frequently, initial budget requests will exceed
  projected revenue
• Finance Committee evaluates requests and prepares
  the final consolidation

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Amending the Budget

• A budget is a planning document, not a guarantee
  of funding nor an authorization to procure goods
  and services
• Changes in plans, new program requirements, under
  execution of events, etc., will require budget
  amendments
• Finance Committee should review the budget
  frequently and amend the budget as events change
  and new funding requests are received

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Budget Review

• Finance Committee members should be provided with
  current budget execution reports monthly if not
  more often
• Budget execution should be considered and
  discussed at least quarterly

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Year End Review

• Finance Committee should review the final budget
  to actual report after the close of the fiscal
  year
• Budget execution and analysis are important
  considerations in evaluating program
  accomplishments

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Budgeting in QuickBooks

• Prepare draft budget for finance committee to
  discuss, change or approve
• Can be basic budget or detailed

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Basic Budget

• Income expense in general detail
• Follows chart of accounts
• Cannot budget for missions

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Detailed Budget

• Department budgets
• Cadet Programs details supplies, printing,
  lodging, travel, fuel, etc.
• Office Supplies broken out to departments
• General, Commander, AE, IG, FM, OPS
• Activity budgets detail types of expenses
• lodging, food, transportation

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QuickBooks

• Enter budget in any way the wing wants to track
  expenses.
• Enter by account
• Enter by detailactivity or department
• Consider how the finance committee wants to
  review.

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QuickBooks

• Enter budget prior to 1 October so you are ready
• Ensure income and expenses are coded
  appropriately to follow the budget
• Print budget report as often as needed
• Send to finance committee
• Send to department directors
• Send to activity directors

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Questions?