Annual Budget
Due Date submission for 2008- 2009 Annual Budget: 31 July 2008
Note: Please submit the budget only when approved by the Management Committee
INCOME
1. Always verify Commonwealth and State/VLA funding amounts with Schedule 1 of the applicable Deed. Possible variances
eg. MBA funding may need to be noted and/or included.
2. Service Generated Income refers to income deriving from the funds provided by VLA eg interest, CLC fees, costs recovered, client contrribution etc. Other sources of income need to be reported elsewhere in CLSIS and accounted for separately in accounting software eg a “class” in Quickbooks, “job” in MYOB.
3. Service Generated Income: use the previous financial year as guide and adjust for changes for the current financial year. To use interest as an example, if your cash balance is the same, then interest will most likely be higher in 08/09 due to higher interest rates. CLE is based on the number of sessions it is intended to provide times the average rate. Costs recovered would be the cost per case times the number of cases.
EXPENDITURE
Salaries
4. Salaries mean looking at the positions required (and desired), the hourly or annual rate and the number of hours for each position.
5. On costs refer to provisions for leave eg annual and long service, and costs such as workcover.
6. Ensure information from accounting software is used to recalculate and update leave provisions at least quarterly.
Premises Cost
7. Check rent agreements for the rate of indexation and when it takes effect. For example, if rent is $50,000 per annum currently with a 5% increase due on 1 January 2009, budget $51,250 for 0809.
8. Other premises costs refers to rates, utilities, security, amenities, cleaning, moving, gardens, relocation costs – in general terms, smaller items that are not repairs or rent.
9. Leases refers to agreements other than those of the premises occupied, especially vehicles and often photocopiers.
Staff Training/ Recruitment
10. Staff training can be budgeted for by either itemising what is required or using a percentage of salaries (exclude on-costs)
eg 1.5% to 2%.
11. Recruitment is costed by allowing for the number of probable staff changes per the cost of a change eg an advertisement in The Age or Infoxchange. This is clearly a “guesstimate” or “probability” situation.
Office oncost
12. Communications may include telephone, fax, internet including website development costs, mobiles, pagers and voicemail.
13. Office Overheads can include couriers, postage, DX, printing, stationary, photocopying, software, repairs of office equipment, computer support.
Insurance
14. Insurance – ensure all types of insurance e.g. directors, public liability, volunteers are covered, visiting last years cost as a base, allow for an increase. If the amount is large, prepayments for the pro-rata period paid into the next financial year need to be adjusted at the beginning and end of each financial year both in the actual results and budget.
Audit
15. The previous year should be a good guide for the annual audit; however other one-off audits may require an amount be budgeted
eg trust audits, audits of internal processes.
Program/ Client Cost
16. Travel costs need to be revised for any changes in staff, new programs, and in 0809 increasing petrol prices if relevant. The last quarter of 07/08 may be the best guide re petrol prices.
17. Programming and planning includes Management Committee, evaluations, projects, consultations, CLE, facilitators, volunteer costs, client related expenses, publicity, community development, strategic planning days (often forgotten) and general advertising.
18. Client disbursement refers literally to disbursements paid for clients but not recovered from the client eg outside legal representation, FOI information requests etc.
Depreciation
19. It is vital for all purposes that an asset register is maintained and kept up to date throughout the financial year. Experience shows waiting for an auditor to prepare one means the calculation will likely reflect the cost of 2 years ago. Having a current schedule ensures assets owned now are included in the depreciation schedule as a base. Also allow for the depreciation on estimated purchases for the financial year. This varies according to the type of asset eg furniture, computers. As a general guide ONLY, allow 10% for furniture and 25% for computers.
20. Following from 19, capital expenditure refers to the full cost of the assets purchased eg $1,500 for a computer. It is vital this is recorded in accounting software as an asset and not (for example) in repairs or minor equipment. Minor equipment is for small items eg a computer modem costing $100.
Other Income
21. Any funding from other bodies refers to grants from trusts, other government departments, interest on non-CLSP funding, project management fees and needs to be listed accordingly. Check current grant agreements and allow for possible new agreements if it is likely they will proceed.
DEFICIT/SURPLUS
22. Contact VLA if carrying forward more than 10% and especially so if the figure is greater than 15%. Send an explanatory note at time of submitting budget.
23. Where a CLC is carrying forward a surplus, at some point it will want to use these funds, putting the CLC in deficit for a particular financial year. Adequate explanation should be given as to the one-off nature of the funds and the value gained from the expenditure e. g. hiring a fundraising co-ordinator for 6 months could be seen as an investment in diversifying funding sources
24. Ensure previous years figures align by checking CLSIS and/or audited reports
Contact Person Mark Courtney 9269 0215