Chapter 5 Scenario_ Preschool Personnel Program Budget

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Eastfield College *

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Management

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Feb 20, 2024

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Chapter 5 Scenario: Preschool Personnel Program Budget Objective: To create a sample program personnel budget and evaluate your budget. Scenario: You are the director of a small early childhood program, forecasting for your upcoming year. Your program will have three classrooms open, each projecting to be full: two toddler rooms of 8 children each and a preschool room of 18. All three rooms will need 2 teachers for the entire hours of operation, 9:00 am to 5:00 pm. You need to create an annual budget that considers the expenses of 6 teachers plus you (adding in 25% for fringe benefits to base salaries) to the income generated by tuition. Current rates are $175 per week for toddlers and $150 per week for preschoolers. Focus Assignment: 1. Create a spreadsheet or table and calculate the average hourly rate you can pay all your teachers and yourself, which includes the percentage of total income you are spending on payroll.

Expense Annual Cost Monthly Cost Weekly Cost Daily Cost Hourly Cost Salaries (6 teachers) $210,000 $17,500 $4,038 $808 $25.25 Fringe benefits $52,500 $4,375 $1,010 $202 $6.32 Total payroll $262,500 $21,875 $5,048 $1,010 $31.57 Age Group Monthly Tuition Toddlers $1,200 Preschool $1,000

Self-Evaluation: 1. For your budget: a. Explain how this budget addresses the issues in the scenario. Assuming 50 weeks of operation per year (taking two weeks off for holidays and maintenance), the weekly payroll cost is $5,048. Dividing that by the total number of hours of operation (8 hours x 5 days x 50 weeks), we get an hourly cost of $31.57. To keep the percentage of the budget spent on payroll at 70% or below, we need to generate at least $375,000 in annual income. Dividing that by the total number of hours of operation (8 hours x 5 days x 50 weeks x 3 classrooms), we get an hourly rate of $39.06. Based on this hourly rate and the expected enrollment in each age group, we can calculate the monthly tuition for each age group as shown above. The cost of payroll is $5,048 per week, based on a 50-week operating year (two weeks off for vacations and maintenance). We may calculate the hourly cost as $31.57 by dividing the entire number of hours of operation (8 hours x 5 days x 50 weeks). We must create income of at least $375,000 each year to keep the budget's payroll expense at 70% or below. This yields an hourly rate of $39.06 when divided by the total number of operating hours (8 hours x 5 days x 50 weeks x 3 classes). b. Give evidence from the chapter supporting this budget (with citations). ● Every program needs both a long-range finan-cial plan and a plan for the upcoming year. Poor financial planning and fiscal management can lead to a lack of funds, which will likely hinder person-nel as they work to achieve program goals. High-quality care for young children is expensive, and funds must be allocated properly to provide a de-velopmentally sound program on which children and parents can depend. No matter how well in-tentioned the staff, a program cannot continue to operate for long without a balanced budget and a reserve fund. (Adams et al., 2021, 100) ● Quality and affordable health insurance is an impor-tant employee benefit that contributes to maintain-ing a quality staff, and it also impacts the budget. (Adams et al., 2021, 101) ● Each staff member’s name, ID num-ber, address, wage or salary (hourly, weekly, biweekly, or monthly), and local taxing district must be entered into the computer. The financial officer must contact federal, state, and local agencies to determine with-holding rates, the current minimum wage, overtime laws, Family and Medical

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